FedEx Home Delivery v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 21, 2016 Decided March 3, 2017
No. 14-1196
FEDEX HOME DELIVERY, AN OPERATING DIVISION OF FEDEX
GROUND PACKAGE SYSTEM, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 15-1066, 15-1116
On Petitions for Review and Cross-Application
for Enforcement of Orders of
the National Labor Relations Board
Maurice Baskin argued the cause for petitioner. With
him on the briefs was Joshua Waxman.
Michael J. Gray, E. Michael Rossman, Steven P.
Lehotsky, Warren Postman, Richard Pianka, and Linda E.
Kelly were on the brief for amici curiae Chamber of Commerce
1
of the United States of America, American Trucking
Associations & National Association of Manufacturers in
support of petitioner.
Kellie Isbell, Attorney, National Labor Relations
Board, argued the cause and filed the brief for respondent.
With her on the brief were Richard F. Griffin, Jr., General
Counsel, John H. Ferguson, Associate General Counsel, Linda
Dreeben, Deputy Associate General Counsel, and Robert
Englehart, Supervisory Attorney.
James B. Coppess argued the cause and filed the brief
for amicus curiae AFL-CIO in support of respondent. With
him on the brief were Lynn K. Rhinehart, Matthew J. Ginsburg,
and Laurence Gold.
Before: HENDERSON, KAVANAUGH, and MILLETT,
Circuit Judges.
Opinion for the Court filed by Circuit Judge MILLETT.
MILLETT, Circuit Judge: FedEx Home Delivery
(“FedEx”) offers package-delivery services to residential
customers throughout the United States. In FedEx Home
Delivery v. NLRB (FedEx I), 563 F.3d 492 (D.C. Cir. 2009),
this court held that single-route FedEx drivers working out of
Wilmington, Massachusetts are independent contractors, not
employees, as the latter term is defined in the National Labor
Relations Act, id. at 504. In this case, the National Labor
Relations Board held, on a materially indistinguishable factual
record, that single-route FedEx drivers are statutorily protected
employees, not independent contractors, when located in
Hartford, Connecticut. Both cannot be right. Having already
answered this same legal question involving the same parties
and functionally the same factual record in Fed Ex I, we give
the same answer here. The Hartford single-route FedEx drivers
are independent contractors to whom the National Labor
2
Relations Act’s protections for collective action do not apply.
We accordingly grant FedEx’s petitions, vacate the Board’s
orders, and deny the Board’s cross-application for
enforcement.
I.
A.
The National Labor Relations Act, 29 U.S.C. §§ 151–
169, offers a variety of protections to “employees” in
workplaces across the United States. The Act is explicit,
however, that the term “‘employee’ * * * shall not
include * * * any individual having the status of an
independent contractor[.]” Id. § 152(3). Accordingly, “[t]he
jurisdiction of the NLRB extends only to the relationship
between an employer and its ‘employees’; it does not
encompass the relationship between a company and its
‘independent contractors.’” C.C. Eastern, Inc. v. NLRB, 60
F.3d 855, 857 (D.C. Cir. 1995).
In NLRB v. United Insurance Company of America, 390
U.S. 254 (1968), the Supreme Court held that the determination
whether a worker is a statutorily protected “employee” or a
statutorily exempt “independent contractor” is governed by
“common-law agency” principles, id. at 256. In applying the
common law, the Supreme Court stressed that “there is no
shorthand formula or magic phrase that can be applied to find
the answer.” Id. at 258. Rather, “all of the incidents of the
relationship must be assessed and weighed with no one factor
being decisive.” Id. “What is important,” the Supreme Court
explained, “is that the total factual context is assessed in light
of the pertinent common-law agency principles.” Id.Following United Insurance, the Board and this court
have generally consulted the Restatement (Second) of Agency
for guidance in conducting the common-law agency analysis.
3
See Lancaster Symphony Orchestra v. NLRB, 822 F.3d 563,
565–566 (D.C. Cir. 2016); North Am. Van Lines, Inc. v. NLRB,
869 F.2d 596, 599–600 (D.C. Cir. 1989). 1 The Restatement
(Second) of Agency provides a non-exhaustive list of ten
factors to consider in deciding whether a worker is an
independent contractor: “(1) ‘the extent of control’ the
employer has over the work; (2) whether the worker ‘is
engaged in a distinct occupation or business’; (3) whether the
‘kind of occupation’ is ‘usually done under the direction of the
employer or by a specialist without supervision’; (4) the ‘skill
required in the particular occupation’; (5) whether the
employer or worker ‘supplies the instrumentalities, tools, and
the place of work for the person doing the work’; (6) the ‘length
of time for which the person is employed’; (7) whether the
employer pays ‘by the time or by the job’; (8) whether the
worker’s ‘work is a part of the regular business of the
employer’; (9) whether the employer and worker ‘believe they
are creating’ an employer-employee relationship; and
(10) whether the employer ‘is or is not in business.’”
Lancaster Symphony, 822 F.3d at 565–566 (quoting
RESTATEMENT (SECOND) OF AGENCY § 220(2) (1957)).
B.
FedEx operates a package-delivery terminal in
Hartford, Connecticut. Drivers for FedEx deliver packages
along certain “routes” that are designated by FedEx. A driver
may serve a single route or multiple routes. Both single-route
and multi-route drivers operate out of the Hartford location. In
2007, the Hartford single-route drivers elected Teamsters
1
See also, e.g., Local 777, Democratic Union Org. Comm.
Seafarers Int’l Union of N. Am., AFL-CIO v. NLRB, 603 F.2d 862,
870 n.22 (D.C. Cir. 1978); Arizona Republic, 349 N.L.R.B. 1040,
1042 (2007); St. Joseph News-Press, 345 N.L.R.B. 474, 477–478
(2005); Argix Direct, Inc., 343 N.L.R.B. 1017, 1020 & n.13 (2004).
4
Local 671 (“Union”) to represent them. FedEx subsequently
filed objections to the election with the Board.
While that administrative appeal was pending, this
court decided FedEx I, holding that FedEx drivers at the
company’s Wilmington, Massachusetts terminals were
“independent contractors” within the meaning of the National
Labor Relations Act. 563 F.3d at 504. In so holding, FedEx I
explained that application of the common-law agency test by
both the Board and this court had shifted over time. See id. at
496–497. For a period, the Board had focused on “an
employer’s right to exercise control” over the workers’
performance of their jobs. Id. at 496. Gradually, however, the
Board began to place “emphasis” on what this court described
as “a more accurate proxy: whether the ‘putative independent
contractors have significant entrepreneurial opportunity for
gain or loss.’” Id. at 497 (quoting Corporate Express Delivery
Sys. v. NLRB, 292 F.3d 777, 780 (D.C. Cir. 2002)).
Examining the factual record, FedEx I noted that some
of the common-law factors supported employee status, while
others were consistent with the drivers being independent
contractors. See 563 F.3d at 503–504. Looking at those factors
through the lens of entrepreneurial opportunity, however, this
court concluded that the indicia of independent contractor
status “clearly outweighed” the factors that would support
employee status. Id. at 504; see id. at 498–502.
FedEx subsequently filed a motion with the Board in
the Hartford case to dismiss the order against it, principally
arguing that FedEx I compelled a ruling in its favor. The
Board, however, issued a decision certifying the Union as the
exclusive representative of the Hartford single-route drivers,
without addressing FedEx I or FedEx’s motion to dismiss.
FedEx then filed a motion for reconsideration, which the Board
rejected in relevant part as “untimely” and “lack[ing] merit.”
D.A. 359–360 & n.2.
5
FedEx then refused to bargain with the Union,
prompting the Union to file unfair labor practice charges
against the company. On October 29, 2010, the Board ruled
that FedEx violated Section 8(a)(5) of the Act, 29 U.S.C.
§ 158(a)(5), by refusing to bargain.
FedEx then filed in this court a petition for review of
the Board’s October 2010 unfair-labor-practice decision,
seeking summary disposition based on FedEx I. Before this
court ruled, the Board sua sponte vacated its decision and
order. We accordingly dismissed FedEx’s petition and motion
as moot.
Three years later, the Board issued a revised decision
and order. FedEx Home Delivery, 361 N.L.R.B. No. 55 (Sept.
30, 2014). Accepting that FedEx I and the case at hand dealt
with “virtually identical” facts, the Board admitted that FedEx
I “[could not] be squared with the Regional Director’s
determination” that the FedEx drivers at the Hartford terminal
were “employees” under the Act. Id. at 8. Nevertheless, the
Board “decline[d] to adopt [FedEx I’s] interpretation of the
Act.” Id. Specifically, the Board disagreed with FedEx I’s
treatment of “entrepreneurial opportunity * * * as an
‘animating principle’” for determining whether a worker is an
“employee” or an “independent contractor” under the Act.
FedEx Home Delivery, 361 N.L.R.B. No. 55, at 1 (quoting
FedEx I, 563 F.3d at 497). In the Board’s view, entrepreneurial
opportunity should merely be one “part of a broader factor
that * * * asks whether * * * [a] putative independent
contractor is, in fact, rendering services as part of an
independent business.” Id. at 10.
The Board added that the “independent-business
factor” should not receive any special weight in the overall
common-law agency analysis. Rather, in light of the Supreme
Court’s instruction in United Insurance that “all of the
incidents of the relationship must be assessed and weighed
6
with no one factor being decisive,” FedEx Home Delivery, 361
N.L.R.B. No. 55, at 9 (quoting United Insurance, 390 U.S. at
258), the Board reasoned that “the weight given to the
independent-business factor will depend upon the factual
circumstances of the particular case,” id. at 12. To the extent
that past Board decisions were inconsistent with those
principles, the Board declared them to be overruled. Id.
Applying its newly announced approach, the Board
concluded that the single-route FedEx drivers based at the
Hartford terminal were “employees” under the Act. FedEx
Home Delivery, 361 N.L.R.B. No. 55, at 12–16. The Board
emphasized, in particular, the “pervasive control” FedEx exerts
“over the essential details of [its] drivers’ day-to-day work,”
and the “core” nature of the drivers’ work to FedEx’s business
operations. Id. at 12, 14.
FedEx again filed a petition for review in this court, as
well as a motion for reconsideration with the Board, which the
Board denied. FedEx Home Delivery, 362 N.L.R.B. No. 29
(Mar. 16, 2015). FedEx then filed a second petition for review
challenging the Board’s denial of reconsideration. The Board
filed a cross-application for enforcement of its order.
II.
As FedEx correctly argues, the question before this
court was already asked and answered in FedEx I. This case
involves the exact same parties—the Board and FedEx Home
Delivery—as FedEx I. The facts are acknowledged by the
Board to be “virtually identical,” see FedEx Home Delivery,
361 N.L.R.B. No. 55, at 8, and the Board makes no effort to
distinguish the two cases factually. The purely legal question
to be decided also is exactly the same: whether the same
materially indistinguishable facts that added up to
independent-contractor status in FedEx I add up to
independent-contractor status in FedEx round two.
7
It is as clear as clear can be that “the same issue
presented in a later case in the same court should lead to the
same result.” In re Grant, 635 F.3d 1227, 1232 (D.C. Cir.
2011) (quoting LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C.
Cir. 1996) (en banc)). Doubly so when the parties are the same.
This case is the poster child for our law-of-the-circuit doctrine,
which ensures stability, consistency, and evenhandedness in
circuit law. See LaShawn, 87 F.3d at 1393 & n.2. 2 Having
chosen not to seek Supreme Court review in FedEx I, the Board
cannot effectively nullify this court’s decision in FedEx I by
asking a second panel of this court to apply the same law to the
same material facts but give a different answer. 3
2
Cf. Brewster v. Commissioner of Internal Revenue, 607 F.2d
1369, 1373 (D.C. Cir. 1979) (per curiam) (“Stare decisis compels
adherence to a prior factually indistinguishable decision of a
controlling court.”) (emphasis added); United States v. Cardales-
Luna, 632 F.3d 731, 734 (1st Cir. 2011) (“[E]ven the narrowest
conception of stare decisis demands that two panels faced with the
same legal question and identical facts reach the same outcome.”).
3
An exception to law-of-the-circuit doctrine applies “when a
conflict exists within our own precedent,” in which case a
subsequent panel is “bound by the earlier” of the two conflicting
decisions. United States v. Old Dominion Boat Club, 630 F.3d 1039,
1045 (D.C. Cir. 2011); see also Sierra Club v. Jackson, 648 F.3d
848, 854 (D.C. Cir. 2011) (“[W]hen a decision of one panel is
inconsistent with the decision of a prior panel, the norm is that the
later decision, being in violation of that fixed law, cannot prevail.”);
Independent Cmty. Bankers of America v. Board of Governors of the
Fed. Reserve Sys., 195 F.3d 28, 34 (D.C. Cir. 1999) (“[W]hen faced
with an intra-circuit conflict, a panel should follow earlier, settled
precedent over a subsequent deviation therefrom.”) (alteration in
original) (quoting Haynes v. Williams, 88 F.3d 898, 900 n.4 (10th
Cir. 1996)). The Board, however, does not assert such an exception
in this case, nor does it claim that its revised view of the common-
law agency test is grounded in any prior decision of this court.
8
To be sure, on matters to which courts accord
administrative deference, agencies may change their
interpretation and implementation of the law if doing so is
reasonable, within the scope of the statutory delegation, and the
departure from past precedent is sensibly explained. See
National Cable & Telecomms. Ass’n v. Brand X Internet
Servs., 545 U.S. 967, 1001–1002 (2005). But the Supreme
Court held in United Insurance that the question whether a
worker is an “employee” or “independent contractor” under the
National Labor Relations Act is a question of “pure” common-
law agency principles “involv[ing] no special administrative
expertise that a court does not possess.” 390 U.S. at 260.
Accordingly, this particular question under the Act is not one
to which we grant the Board Chevron deference or to which the
Brand X framework applies. See Aurora Packing Co. v. NLRB,
904 F.2d 73, 75–76 (D.C. Cir. 1990) (“Deference under the
Chevron doctrine * * * does not apply here because of
the * * * direction that the Board and the courts apply the
common law of agency to the issue.”).
The Board contends that FedEx I transgressed the
Supreme Court’s command in United Insurance to consider
and weigh all of the common-law factors in evaluating
employee status. But, as we indicated in Lancaster Symphony,
FedEx I did consider all of the common-law factors as the law
requires. See Lancaster Symphony, 822 F.3d at 565 (citing
FedEx I, 563 F.3d at 492 & n.1, for the common-law factors
that “the Board, like this court, considers” “[i]n conducting th[e
employee-or-independent-contractor] inquiry”); see also
FedEx I, 563 F.3d at 504 (“We have considered all the common
law factors, and, on balance, are compelled to conclude they
favor independent contractor status.”).
Finally, the Board argues that our precedent requires us
to enforce a finding of employee status if the Board “made a
choice between two fairly conflicting views.” C.C. Eastern,
60 F.3d at 858 (quoting North Am. Van Lines, 869 F.2d at 599).
9
But that standard applies only to the Board’s application of
established law to a particular factual record. See Aurora
Packing, 904 F.2d at 75 (“[D]eference would only be extended
to the Board’s determination of employee status—an
‘application of law to fact’—insofar as [the Board] made a
‘choice between two fairly conflicting views’ in a particular
case.”) (quoting United Insurance, 390 U.S. at 260); see also
C.C. Eastern, 60 F.3d at 858 (characterizing the Board’s
employee-or-independent-contractor determination as an
“application of the law of agency to established and undisputed
findings of fact”). We do not accord the Board such breathing
room when it comes to new formulations of the legal test to be
applied. In addition, given FedEx I, we cannot say that this
case involves “two fairly conflicting views” of how the law
should apply to these facts.
III.
In sum, we hold that FedEx I answers the case before
us, and we accordingly grant FedEx’s petitions for review,
vacate the Board’s orders, and deny the Board’s cross-
application for enforcement. 4
So ordered.
4
FedEx also argues that the Board erred in overruling two
objections to the conduct of the election. As FedEx acknowledges,
“it is unnecessary to reach this issue” if the Hartford single-route
drivers are “independent contractors” under the Act, Pet’r’s Br. 50,
as we hold they are.
10