Lead Opinion
Opinion for the Court filed by Circuit Judge BROWN.
Opinion dissenting in part filed by Cii'cuit Judge GARLAND.
FedEx Ground Package System, Inc. (“FedEx”), a company that provides small package delivery throughout the country, seeks review of the determination of the National Labor Relations Board (“Board”) that FedEx committed an unfair labor practice by refusing to bargain with the union certified as the collective bargaining representative of its Wilmington, Massachusetts drivers. The Board cross-applies for enforcement of its order. Because the drivers are independent contractors and not employees, we grant FedEx’s petition, vacate the order, and deny the cross-application for enforcement
I.
In 1998, FedEx acquired Roadway Package Systems and changed its name to FedEx Ground Package System, Inc. The company has two operating divisions: the Ground Division and the Home Delivery Division or FedEx Home. The Ground Division delivers packages of up to 150 pounds, principally to and from business customers. FedEx Home delivers packages of up to 75 pounds, mostly to residential customers. The Wilmington terminals are part of FedEx Home, a network that operates 300 stand-alone terminals throughout the United States and shares space in an additional 200 Ground Division facilities. FedEx Home has independent contractor agreements with about 4,000 contractors nationwide with responsibility for over 5,000 routes.
In July 2006, the International Brotherhood of Teamsters, Local Union 25, filed two petitions with the NLRB seeking representation elections at the Jewel Drive and Ballardvale Street terminals in Wilmington, neither of which boasts many contractors. The Union won the elections, prevailing by a vote of 14 to 6 at Jewel Drive and 10 to 2 at Ballardvale Street, and was certified as the collective bargaining representative at both. FedEx refused to bargain with the Union. The company did not contest the vote count; instead, FedEx disputed the preliminary finding that its single-route drivers are “employees” within the meaning of Section 2(3) of the National Labor Relations Act, 29 U.S.C. § 152(3).
The Board rejected FedEx’s Request for Review of the Regional Director’s Decision and Direction of Election on November 8, 2006. In dissent, Chairman Battista disagreed with “the refusal to permit [FedEx] to introduce system-wide evidence concerning the number of route sales and the amount of profit,” as the information would be relevant to the determination of the drivers’ “entrepreneurial interest in their position.” FedEx Home Delivery and Local 25, N.L.R.B. Case Nos. 1-RC-22034, 22035, (Nov. 8, 2006) (Battista, C., dissenting). After the election, the Board found FedEx violated Sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (5), by refusing to bargain. Finding FedEx’s objection that its contractors are not employees had been raised and rejected in the representation proceedings, the Board issued its order on September 28, 2007. FedEx filed a timely petition for review and the Board filed its cross-application for enforcement. The Union intervened in support of the Board’s cross-application.
II.
To determine whether a worker should be classified as an employee or an
This potential uncertainty is particularly problematic because the line between worker and independent contractor is jurisdictional — the Board has no authority whatsoever over independent contractors. See id. at 598. Consequently, it is “one of this court’s principal functions” to “ensur[e] that the Board exercises power only within the channels intended by Congress,” especially as determining status from undisputed facts “involves no special administrative expertise that a court does not possess.” Id. We thus do not grant great or even “normal[ ]” deference to the Board’s status determinations; instead, we will only uphold the Board if at least “it can be said to have ‘made a choice between two fairly conflicting views.’” C.C. Eastern, Inc. v. NLRB,
For a time, when applying this common law test, we spoke in terms of an employer’s right to exercise control, making the extent of actual supervision of the means and manner of the worker’s performance a key consideration in the totality of the circumstances assessment. Though all the common law factors were considered, the meta-question, as it were, focused on the sorts of controls employers could use without transforming a contractor into an employee. E.g., NAVL,
Gradually, however, a verbal formulation emerged that sought to identify the essential quantum of independence that separates a contractor from an employee, a process reflected in cases like C.C. Eastern and NAVL where we used words like control but struggled to articulate exactly what we meant by them. “Control,” for instance, did not mean all kinds of controls, but only certain kinds. See, e.g., C.C. Eastern,
In any event, the process that seems implicit in those cases became explicit — indeed, as explicit as words can be-in Corporate Express Delivery Systems v. NLRB,
This struggle to capture and articulate what is meant by abstractions like “independence” and “control” also seems to play a part in the Board’s own cases, though we readily concede the Board’s language has not been as unambiguous as this court’s binding statement in Corporate Express. For instance, in the latest but far from only statement of the principle, see St. Joseph News Press,
The record here shares many of the same characteristics of entrepreneurial potential.
Tellingly, contractors may contract to serve multiple routes or hire their own employees for their single routes; more than twenty-five percent of contractors have hired their own employees at some point. See Resp’ts Br. at 6. “The multiple route contractors have sole authority to hire and dismiss their drivers”; they are responsible for the “drivers’ wages” and “all expenses associated with hiring drivers, such as the cost of training, physical exams, drug screening, employment taxes, and work accident insurance.” Representation Decision, slip op. at 27.
In its argument to this court, the Board, echoed by the dissent, discounts this evidence of entrepreneurial opportunity by saying any so-called profit merely represents the value of the vehicles, which were sold along with the routes. But if a vehicle depreciates in value, it is not worth as much as it was before; that is tautological. Here, buyers paid more for a vehicle and route than just the depreciated value of the vehicle — in one instance more than $10,000 more. Therefore, as the Regional Director did, we find this value is profit. Compare Representation Decision, slip op. at 38' (“Neal’s profit on the sale of his route was only $3000 to $6000,” and “[a]fter deducting the value of the truck ... it appears that, at best, Ferreira paid Jung somewhere between $11,000 and $16,000 for the route.”) with Dis. Op. at 516 (suggesting no “gain at all” may have been shown). The amount of profit may be “murky,” as it may be as high as $6,000 and $16,000 or as low as $3,000 or $11,000, respectively, but the profit is real. Representation Decision, slip op. at 38. That this potential for profit exists is unsurprising: routes are geographically defined, and they likely have value dependent on those geographic specifics which some contractors can better exploit than others. For example, as people move into an area, the ability to profit from that migration varies; some contractors using more efficient methods can continue to serve the entire route, while others cannot.
It is similarly confused to conclude FedEx gives away routes for free. See Dis. Op. at 515. A contractor agrees to provide a service in return for compensation, i.e., both sides give consideration. If a contractor does not do what she says, FedEx suffers damages, just as she does if FedEx does not pay what is owed. Servicing a route is not cheap; one needs a truck (which the contractor pays for) and a driver (which the contractor also pays for, either directly or in kind). To say this is giving away a route 'is to say when one hires a contractor to build a house, one is just giving away a construction opportunity. All of this evidence thus supports finding these contractors to be independent.
The Regional Director, however, thought FedEx’s business model distinguishable from those where the Board had concluded the drivers were independent contractors. For example, FedEx requires: contractors to wear a recognizable uniform and conform to grooming standards; vehicles of particular color (white) and within a specific size range; and vehicles to display FedEx’s logo in a way larger than that required by DOT regulations. The company insists drivers complete a driving course (or have a year of commercial driving experience, which need not be with FedEx) and be insured, and it
But those distinctions, though not irrelevant, reflect differences in the type of service the contractors are providing rather than differences in the employment relationship. In other words, the distinctions are significant but not sufficient. FedEx Home’s business model is somewhat unique. The service is delivering small packages, mostly to residential customers. Unlike some trucking companies, its drivers are not delivering goods that FedEx sells or manufacturers, nor does FedEx move freight for a limited number of large clients. Instead, it is an intermediary between a diffuse group of senders and a broadly diverse group of recipients. With this model comes certain customer demands, including safety. As the Internal Revenue Service (“IRS”) persuasively notes, and ordinary experience confirms, a uniform requirement often at least in part “is intended to ensure customer security rather than to control the [driver].” Internal Revenue Service, Employment Tax Guidelines: Classifying Certain Van Operators in the Moving Industry 23, http:// www.irs.gov/pub/irs-utl/van-ops.pdf (last visited April 3, 2009).
We have held that constraints imposed by customer demands and government regulations do not determine the employment relationship. See C.C. Eastern,
The Regional Director also emphasized that these “contractors perform a function that is a regular and essential part of FedEx Home’s normal operations, the delivery of packages,” and that few have seized any of the alleged entrepreneurial opportunities. Representation Decision, slip op. at 34, 38. While the essential nature of a worker’s role is a legitimate consideration, it is not determinative in the face of more compelling countervailing factors, see Aurora Packing v. NLRB,
III.
Our dissenting colleague reads our precedent differently than we do, and thus reaches a different conclusion. Of course the facts in our past holdings are not identical to those here, but there is no reason to distinguish this case from those where we have rejected the Board’s attempt to assert jurisdiction over independent contractors. In fact, this case is relatively straightforward because not only do these contractors have the ability to hire others without FedEx’s participation, only here do they own their routes — as in they can sell them, trade them, or just plain give them away. Moreover, if this court had shown as much deference to the Board as our colleague seems to suggest is its due, we wonder how C.C. Eastern and NAVL could possibly have been decided the way that they were. Because the dispute turns on precedent, we recommend you read our cases — they are quite short— and see for yourself whether our friend’s fight really is with us at all.
The dissent, for instance, argues that emphasizing entrepreneurialism has only truly begun with this case, and suggests we are doing so here for reasons apart
Likewise, though conceding ours is a “fair reading of [Corporate Express ], which contains considerable language regarding entrepreneurial opportunity and the benefits of using such a test,” the dissent nonetheless argues there is a narrower way to understand that case such that it still focuses on the extent of control. Dis. Op. at 508. Put another way, Corporate Express — despite its seemingly unambiguous language — to him need not be read as evincing a shift towards entrepreneurialism at all. We cannot adopt that reading because the court affirmatively declined to determine the contractors’ status under a “means and manner test.” Corp. Express,
But even if Corporate Express never happened, the result here is unchanged. While on some points C.C. Eastern and NAVL are distinguishable — for instance, in C.C. Eastern there were no appearance requirements for man or machine (though “the tractor must be suitable for the task at hand”), see
We have considered all the common law factors, and, on balance, are compelled to conclude they favor independent contractor status. The ability to operate multiple routes, hire additional drivers (including drivers who substitute for the contractor) and helpers, and to sell routes without permission, as well as the parties’ intent expressed in the contract, augurs strongly in favor of independent contractor status. Because the indicia favoring a finding the contractors are employees are clearly outweighed by evidence of entrepreneurial opportunity, the Board cannot be said to have made a choice between two fairly conflicting views. Though evidence can be marshaled and debater’s points scored on both sides, the evidence supporting independent contractor status is more compelling under our precedent. The evidence might have been stronger still had not the Regional Director erroneously excluded the national data. But even as the record stands, the Board’s determination was legally erroneous.
Accordingly, we grant the petition, vacate the Board’s order, and deny the cross-application for enforcement.
So ordered.
Notes
. The common law factors include, inter alia, "the extent of control which, by the agreement, the master may exercise over the details of the work”; "the kind of occupation”; whether the worker "supplies the instrumentalities, tools, and the place of work”; “the method of payment, whether by the time or by the job”; "the length of time for which the person is employed”; whether “the work is a part of the regular business of the employer”; and the intent of the parties. Restatement (Second) of Agency § 220(2).
. See Kisner v. Jackson,
. The common law test, after all, is not merely quantitative. We do not just count the factors that favor one camp, and those the other, and declare that whichever side scores the most points wins. Instead, there also is a qualitative assessment to evaluate which factors are determinative in a particular case, and why. In Corporate Express, we said this qualitative evaluation '‘focus[es] not upon the employer's control of the means and manner of the work but instead upon whether the putative independent contractors have a 'significant entrepreneurial opportunity for gain or loss.’ ”
. FedEx also does not provide benefits or withhold taxes. While unrelated to entrepreneurialism, this goes to party intent. See C.C. Eastern,
. We recognize FedEx seeks to "make full use of the Contractor's equipment,” but it is undisputed the contractors are only obligated to provide service five days a week. Our precedent speaks to this: “Moreover, as the drivers work only 40 to 50 hours per week for the Company, it seems that their schedules do not preclude them from taking on additional hauling business during their off-hours.” C.C. Eastern,
. We are aware the Regional Director excluded contractors with multiple routes from the bargaining units as statutory supervisors, even though the "employees” of those "supervisors” do not, in fact, work for FedEx. Representation Decision, slip op. at 42-43. This classification is not before us. But what is before us is the puzzling argument, adopted but not defended by our colleague, see Dis. Op. at 515, that because they were excluded, everything about them is somehow irrelevant, as if — poof!—they just vanished. Multi-route contractors signed the same contract as the others, and just as the national data is relevant in assessing the rights available under the contract, id. at 517-19, so are the activities of these contractors.
. We, of course, are not deferring to the IRS. See Dis. Op. at 511 n. 10. Our standard of review here is unusual. Though not de novo, we must enforce the bounds on the Board’s jurisdiction set by Congress. NAVL,
. The Regional Director noted too that "FedEx Home offers what is essentially a take-it- or-leave-it agreement.” But we will "draw no inference of employment status from merely the economic controls which many corporations are able to exercise over independent contractors with whom they contract.” NAVL, 869 F.2d at 599.
Dissenting Opinion
dissenting in part:
In National Labor Relations Board v. United Insurance Co. of America, the Supreme Court held that Congress intended “the Board and the courts” to “apply the common-law agency test ... in distinguishing an employee from an independent contractor” under the National Labor Relations Act (NLRA).
This is not merely a factual dispute. Underlying my colleagues’ conclusion is their view that the common-law test has gradually evolved until one factor— “whether the position presents the opportunities and risks inherent in entrepreneurialism” — has become the focus of the test. Op. at 497, 503. Moreover, in their view, this factor can be satisfied by showing a few examples, or even a single instance, of a driver seizing an entrepreneurial opportunity. Id. at 502.
Although I do not doubt my colleagues’ sincerity, I detect no such evolution. To the contrary, the Board and the courts have continued to follow the Supreme Court’s injunction that “there is no shorthand formula or magic phrase that can be applied to find the answer, but all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.” United Ins.,
I can and do, however, fault the Board’s refusal to give FedEx a fair opportunity to make its case under the appropriate test. As the court correctly notes, the Regional Director refused to permit FedEx to introduce evidence that may be relevant to the question of whether its drivers have significant entrepreneurial opportunities. Regardless of whether one considers entrepreneurial opportunity as only one factor (as it is in the common-law test) or as the focus of the test (as my colleagues believe it to be), FedEx surely had the right to introduce the evidence necessary to make its case.
I
A
The NLRA makes it “an unfair labor practice for an employer ... to refuse to bargain collectively with the representatives of his employees.” 29 U.S.C. § 158(a)(5). Section 2(3) of the Act, as amended by the 1947 Labor Management Relations Act, provides that the term “employee” “shall not include ... any individual having the status of an independent contractor.” 29 U.S.C. § 152(3). In United Insurance, the Supreme Court held that the “obvious purpose of this amendment was to have the Board and the courts apply general agency principles in distinguishing between employees and independent contractors under the Act.... Thus there is no doubt that we should apply the common-law agency test ... in distinguishing an employee from an independent contractor.” United Ins.,
The cases under review in United Insurance presented the question of whether certain agents of an insurance company were employees or independent contractors. The Supreme Court determined that
the decisive factors in these cases become the following: the agents ... perform functions that are an essential part of the company’s normal operations; they need not have any prior training or experience, but are trained by company supervisory personnel; they do business in the company’s name with considerable assistance and guidance from the company and its managerial personnel and ordinarily sell only the company’s policies; the “Agent’s Commission Plan” that contains the terms and conditions under which they operate is promulgated and changed unilaterally by the company; the agents account to the company for the funds they collect under an elaborate and regular reporting procedure; the agents receive the benefits of the company’s vacation plan and group insurance and pension fund; and the*506 agents have a permanent working arrangement with the company under which they may continue as long as their performance is satisfactory.
Id. at 258-59,
In the succeeding decades, the NLRB has consistently “[a]ppl[ied] the common-law agency test as interpreted by the Supreme Court in NLRB v. United Insurance Co.” to determine whether a worker is an employee or an independent contractor. Roadway Package Sys., Inc. (Roadway II),
This Circuit has likewise recognized that “Congress intended that traditional agency
B
My colleagues contend that “[gradually,” both this Court and the Board shifted away from “the unwieldy control inquiry in favor of a more accurate proxy: whether the ‘putative independent contractors have significant entrepreneurial opportunity for gain or loss.’ ” Op. at 496-97 (quoting Corporate Express Delivery Sys. v. NLRB,
The cases, however, do not evidence this gradual evolution to a test that emphasizes entrepreneurial opportunity. According to my colleagues, the evolutionary process began “implicitly]” in our decisions in NAVL and C.C. Eastern. Op. at 497. It is true that those decisions listed entrepreneurial opportunity as a relevant factor, notwithstanding that it is not expressly mentioned in either United Insurance or the Restatement (or in any comment to the Restatement
My colleagues cite only one case from this (or- any) Circuit, our 2002 opinion in Corporate Express, for the proposition that entrepreneurial opportunity has “explicitly]” become the emphasis of the independent contractor test. Op. at 497. I do not dispute that theirs is one fair reading of that opinion, which contains considerable language regarding entrepreneurial opportunity and the benefits of using such a test. But Corporate Express did not purport to overrule Supreme Court, Circuit, and Board precedent. Indeed, in affirming as reasonable the Board’s determination that the owner-operator drivers in that case were not independent contractors, the court not only agreed that they lacked entrepreneurial opportunity, but also acknowledged that the Board may have correctly determined that the employer controlled the way in which they performed their jobs. Corporate Express,
My colleagues maintain that the evolution toward an emphasis on entrepreneurial opportunity “seems to play a part in the Board’s own cases,” although they “readily concede the Board’s language has not been ... unambiguous.” Op. at 498. The principal NLRB decision upon which they rely is Arizona Republic, a decision issued after the Regional Director’s decision in this case. Ariz. Republic,
Finally, I do not dispute my colleagues’ contention that the multi-factor analysis of the common law is “not especially amenable to any sort of bright-line rule.” Op. at 495-96. Although they acknowledge that an emphasis on entrepreneurial opportunity “does not make applying the test purely mechanical,” they maintain that “the line drawing is easier” under that test. Id. at 498. There is no question that the common-law agency test makes for difficult line drawing. Indeed, the Supreme Court expressly acknowledged as much when it announced the test. See United Ins.,
But the comparative practical advantage of one or the other of these two tests has no bearing on which one we must apply. Although the NLRB may have authority to alter the test, or at least to alter its focus, see Chevron,
II
In this case, the NLRB’s Regional Director applied the traditional “common law agency test.” FedEx Home Delivery and Local 25, N.L.R.B. Case Nos. 1-RC-22034, 22035, slip op. at 33 (First Region, Sept. 20, 2006) [hereinafter Regional Director’s Decision], In so doing, she “considered] all the incidents of the individual’s relationship with the employing entity,” id., including both the extent of FedEx’s control over the drivers and the extent of the drivers’ entrepreneurial opportunities, id. at 35-36. Although the Regional Director acknowledged many of the facts cited by my colleagues in support of FedEx’s contention that the contractors are independent contractors, facts that I do not rehearse here, she concluded that they were outweighed by other factors supporting employee status. Id. at 39. Part II.A reviews the bulk of the factors that the Director found to support employee status. Part II.B discusses her analysis of the issue of entrepreneurial opportunity.
A
In a lengthy and considered opinion, the Regional Director found the following facts to favor a determination that FedEx Home Delivery’s drivers, whom the company calls “contractors,” were employees:
[A]ll the FedEx Home contractors perform a function that is a regular and essential part of FedEx Home’s normal operations, the delivery of packages.... [A]ll contractors must do business in the name of FedEx Home[,] ... wear[ ] FedEx Home-approved uniforms and badges, ... [and] operate vehicles that must meet FedEx Home specifications and uniformly display the FedEx Home name, logo, and colors.... No prior delivery training or experience is required, and FedEx Home will train those with no experience....
... [Contractors are not permitted to use their vehicles for other purposes while providing service for FedEx Home. The contractors have a contractual right to use their FedEx Home trucks in business activity outside their relationship with FedEx Home during off-hours, provided they remove all FedEx Home markings, but only one former multiple route contractor ... and no current contractors at either Wilmington terminal have ever done so....
... FedEx Home exercises substantial control over all the contractors’ performance of their functions. FedEx Home offers what is essentially a take-it-or-leave-it agreement.... [It] retains the right to reconfigure the service area unilaterally. All contractors must furnish a FedEx Home-approved vehicle and FedEx Home-approved driver daily from Tuesday through Saturday; they do not have discretion not to provide delivery service on a given day. While all contractors control their starting times and take breaks when they wish, their control over their work schedule is*511 circumscribed by the requirement that all packages be delivered on the day of assignment____
... FedEx Home provides support to all its contractors in various ways that are inconsistent with independent contractor status.... FedEx Home provides extensive support to contractors by offering the Business Support Package and arranging for the required insurance, thus providing an array of required goods and services that would be far more difficult for contractors to arrange on their own.... FedEx Home also offers to arrange for approved substitute drivers for its contractors by virtue of the Time Off Program. FedEx Home provides contractors who maintain sufficient vehicle maintenance accounts with $100 per accounting period to help defray repair costs[, and] requires contractors to permit FedEx Home to pay certain vehicle-related taxes and fees on their behalf and to have the payments deducted from their settlement.
Regional Director’s Decision at 34-37 (internal citations omitted). Many of these are the kind of facts that United Insurance, the Restatement, and numerous Circuit and Board decisions confirm are indicative of employee status.
My colleagues nonetheless reject the import of many of these facts, arguing that they merely “reflect differences in the type of service the contractors are providing rather than differences in the employment relationship.” Op. at 501. In particular, the court rejects the import of the following requirements imposed by FedEx: that drivers wear a recognizable uniform; that vehicles be of a particular color and size range; that trucks display the FedEx logo in a size larger than Department of Transportation regulations require; that drivers complete a driving course if they do not have prior training; that drivers submit to two customer service rides per year to audit their performance; and that a truck and driver be available for deliveries every Tuesday through Saturday. Id. The courts and the Board,
B
In accord with court and agency precedent, the Regional Director also considered whether FedEx Home Delivery’s drivers have significant entrepreneurial opportunity for gain or loss. For the following reasons, she concluded that the evidence of entrepreneurial opportunity was weak:
The contractors’ compensation package also supports employee status. With [one] exception ..., FedEx Home unilaterally establishes the rates of compensation for all contractors.... [T]here is little room for the contractors to influence their income through their own efforts or ingenuity, as their terminal manager determines, for the most part, how many deliveries they will make each day.... A contractor’s territory may be unilaterally reconfigured by FedEx Home. FedEx Home tries to insulate its contractors from loss to some degree by means of the vehicle availability payment, which they receive just for showing up, and the temporary core zone density payment, both of which payments guarantee contractors an income level predetermined by FedEx Home, irrespective of the contractors’ personal initiative. FedEx Home also shields drivers from loss due to substantial increases in fuel prices by means of the fuel/mileage settlement.
Regional Director’s Decision at 37.
Notwithstanding these findings, my colleagues perceive many “characteristics of entrepreneurial potential” in the drivers’ relationship to FedEx. Op. at 498. Some of the characteristics they cite, however, appear to have little to do with entrepreneurial opportunity. For example, the court’s opinion notes that FedEx’s Standard Contractor Operating Agreement “specifies the contractor is not an employee of FedEx for any purpose.” Id. at 498-99. But the label FedEx puts on its rela
My colleagues also observe that FedEx “may not prescribe hours of work [or] whether or when the contractors take breaks,” and that the drivers “are not subject to reprimands or other discipline,” Op. at 498 — all of which go not to the workers’ entrepreneurial opportunity but to the extent of the employer’s control, a factor discussed in Part II.A above. In any event, although FedEx does not fix specific hours or break times, it does require its contractors to provide delivery services every day, Tuesday through Saturday, and to finish each day’s deliveries by the end of the day. Regional Director’s Decision at 17, 36.
In addition, my colleagues state that “[a]t least one contractor has negotiated with FedEx for higher fees.” Op. at 499. Without agreeing that a worker’s ability to negotiate his salary takes him out of the category of “employee,” the Regional Director rightly regarded the only evidence on this point as quite weak: One former manager testified that one former driver “once requested some customer service rides to gauge if his core zone payment was set properly, and the payment was raised as a result, although [the manager] was not sure by how much. There is no evidence that any other contractors at the Wilmington facilities have negotiated a change in their core zone payment.” Regional Director’s Decision at 20.
Closer to the mark on the issue of entrepreneurial opportunity is the court’s observation that drivers “are responsible for all the costs associated with operating and
My colleagues further note that, under the Operator Agreement, drivers “may use the vehicles for other commercial or personal purposes” when they are not in the service of FedEx, “so long as they remove or mask all FedEx Home logos and markings.” Op. at 498. But do the drivers actually use their trucks for other purposes? Not so much. Indeed, the most that can be said is that “some do use them for personal uses like moving family members,” id., hardly an indicator of a “ ‘significant entrepreneurial opportunity for gain or loss,’ ” id. at 497 (quoting Corporate Express,
Based on these facts, the Regional Director found that the
“lack of pursuit of outside business activity appears to be less a reflection of entrepreneurial choice by the ... drivers and more a matter of the obstacles created by their relationship with [the Company.]” Thus, the contractors’ contractual right to engage in outside business falls within the category of “entrepreneurial opportunities that they cannot realistically take,” because the contractors’ work schedules prevent them from taking on additional business during their off-hours during the workweek.
Regional Director’s Decision at 35 (quoting Roadway III,
My colleagues also note the fact that FedEx drivers “may contract to serve multiple routes,” and that if they do so, they may hire other drivers to handle those routes. Op. at 499. Although this, too, may indicate entrepreneurial opportunity, there were only 3 multiple-route drivers operating out of the Wilmington facilities. Regional Director’s Decision at 28. This is as compared to a case like Arizona Republic, in which the Board determined that newspaper carriers were independent contractors after finding that 363 of them had multiple routes. Ariz. Republic,
My colleagues find particularly significant the fact that drivers have a contractual right to sell their routes, and that this could provide an opportunity for profit. That theoretical possibility, however, is tightly constrained. The drivers may sell only to those buyers whom FedEx accepts as qualified; the company gives out routes without charge,
In light of these constraints, it is not surprising that, although there was evidence that drivers abandoned their routes without selling them, id. at 32, there was little evidence that any driver had ever materially profited from a sale: “[T]here is no evidence that any Ballardvale contractor has ever sold a route,” and there is evidence of only one single-route sale at Jewel Drive. Id. at 31, 38.
C
It would be a mistake, however, to read the court’s opinion as reflecting nothing more than a factual disagreement with the NLRB, even on the question of whether the drivers had entrepreneurial opportunity. There is something more important at stake here. In concluding that the indicia of entrepreneurial opportunity were weak, the Regional Director emphasized that few operators seized any of the opportunities that allegedly were available to them. Accordingly, she adhered to the NLRB’s precedent in Roadway III, which involved FedEx Home’s predecessor corporation, wherein the “Board found that evidence of a few ... sales ... [was] insufficient to support a finding of independent contractor status, particularly since it was unclear from the record whether any driver had profited materially from a sale.” Regional Director’s Decision at 38 (citing
My colleagues, by contrast, maintain that the failure to actually exercise theoretical opportunities is “beside the point” because “ ‘it is the worker’s retention of the right to engage in entrepreneurial activity rather than his regular exercise of that right that is most relevant.’ ” Op. at 502 (quoting C.C. Eastern,
Quoting C.C. Eastern and citing Arizona Republic, my colleagues suggest that “even ‘one instance’ of a driver using such an opportunity can be sufficient to ‘show[ ] there is no unwritten rule or invisible barrier preventing other drivers from likewise exercising their contractual right.’ ” Op. at 502. But all C.C. Eastern held was that under those circumstances, the Board had erred in “discounting] to zero” the significance of that single factor in the traditional multi-factor test. C.C. Eastern,
The import of my colleagues’ suggestion that one or even a few examples of the exercise of contractual rights can be enough to decide the entrepreneurialism factor is magnified by their view that this factor is not just one element in a multifactor test, but rather the test’s “emphasis” — so that an insubstantial exercise may, in effect, tilt the entire outcome.
It is not unreasonable for the NLRB to take the position that a material number of workers must actually take advantage of an opportunity before it will conclude that the opportunity is significant and realistic rather than insubstantial and theoretical. See Regional Director’s Decision at 39. Even if that is not the better rule, “the least that can be said for the Board’s decision is that it made a choice between two fairly conflicting views, and under these circumstances the Court of Appeals should have enforced the Board’s order.” United Ins.,
Ill
But there is a rub. Perhaps recognizing the thinness of the record, FedEx attempted to improve its proof of entrepreneurial opportunity by proffering “system-wide evidence concerning the number of route sales and the amount of profit, if any, on any such sale.” Order, FedEx Home Delivery, N.L.R.B. Case Nos. 1-RC-22034, 22035 (Nov. 8, 2006) (Battista, Chrmn., dissenting). The Regional Director, however, “refusfed] to permit the Employer to introduce” this evidence. Id. In light of that refusal, the Chairman of the NLRB dissented from the denial of Board review, protesting that this “evidence may be relevant to the issue of whether the drivers have an entrepreneurial interest in their position.” Id.
In support of her ruling, the Regional Director said only that “evidence of route sales and entrepreneurial activity at other terminals had no bearing on the economic value of route sales” at the Wilmington facilities. Regional Director’s Decision at 6. Why that would be so, she did not say. Perhaps there is something special about the Wilmington facilities, especially as compared to others that are far away. But the Director did not identify what the idiosyneracy might be, or say why at least evidence regarding nearby terminals would not be relevant. See Burns Elec. Sec. Servs., Inc. v. NLRB,
The exclusion of FedEx’s evidence appears particularly arbitrary because the Regional Director did consider other evidence regarding some terminals not at issue in this case. See Regional Director’s Decision at 4-5. So did the Board in Roadway III, where it relied on nationwide data to conclude that drivers were not independent contractors. See
In sum, the Regional Director’s failure to reasonably explain her refusal to permit FedEx to prove its case requires that we grant the petition for review and remand the case.
IV
My colleagues conclude that, “[bjecause the indicia favoring a finding [that] the contractors are employees are clearly outweighed by evidence of entrepreneurial opportunity, the Board cannot be said to have made a choice between two fairly conflicting views.” Op. at 504. They reach this conclusion by giving the entrepreneurial opportunity factor a weight, and analyzing it in a way, that the common law of agency — as construed by the courts and the NLRB — does not. Although the indeterminate nature of the common-law test may be problematic, and although the
We can and should, however, reject the Board’s unexplained refusal to give FedEx a fair opportunity to make its case under the appropriate test. Accordingly, I would remand the case for further proceedings.
. See also NLRB v. Town & Country Elec., Inc.,
. Accord Ariz. Republic,
. The Restatement provides:
In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(£) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the employer;
(i) whether or not the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.
Restatement (Second) of Agency § 220(2).
. See also Seattle Opera v. NLRB,
. Restatement comment (d), to which my colleagues refer, states only that a "full-time cook is regarded as a servant” — and not an independent contractor — "although it is understood that the employer will exercise no control over the cooking.” Restatement (Second) of Agency § 220(1) cmt. d. The comment does not mention entrepreneurial opportunity, which plays no role in its analysis of the cook’s status.
. See also C.C. Eastern,
. I do not suggest that Corporate Express should be read as "focusfing] on the extent of control,” Op. at 503, but rather that it should not be read as giving primacy to entrepreneurial opportunity. Moreover, to the extent that there has been a shift of emphasis in the Board’s own cases, it has been toward regarding no single factor as primary — whether it be opportunity or control. See St. Joseph News-Press,
. See St. Joseph News-Press,
. See, e.g., United Ins.,
. It is to the precedents of the Board, and not to those of the Internal Revenue Service, that we owe deference, as only the former is charged with enforcing the provisions of the NLRA. Compare Op. at 501 (citing an IRS guideline to support the proposition that a uniform requirement does not reflect employer control), with, e.g., Roadway III,
. See, e.g., United Ins.,
. See, e.g., United Ins.,
. See Corporate Express,
. The Regional Director also noted that a driver cannot take a vacation, or even a day off, when he wants to, without providing a replacement. See Regional Director's Decision at 26; id. at 40 (distinguishing other cases in part on the basis that drivers for those companies were "not required to provide delivery services each day” and “were free to elect not to accept routes on specific days”). Even those who participate in FedEx’s Time Off Program must schedule vacations in advance, and weeks are assigned by seniority. Id. at 25-26.
. My colleagues also note that "all contractors here own their vehicles.” Op. at 503. The same was true in Corporate Express, but we nonetheless found that those drivers had "no real entrepreneurial opportunities.”
. A former manager testified that one former driver, Alan Douglass, used his truck to deliver lawn mowers for a repair company. Regional Director's Decision at 15.
. It is true that a driver could take on extra work on his weekends (although none do). But C.C. Eastern did not hold that this would make him an independent contractor, Op. at 499 n. 5 — no more than taking on a second, weekend job would turn any full-time employee into an "entrepreneur.”
. There is nothing confused about saying that FedEx gives out routes without charge when it does not charge anything for routes. See Op. at 500. Of course the driver agrees to provide delivery service on the route, and of course FedEx pays compensation for that service. Id. But the fact that FedEx will give a new driver a route without charging for it, and can reconfigure any route that a driver purchases from a former driver, plainly constrains the value of the latter.
. The only other sale was by a multiple-route driver. The driver, Timothy Jung, received about $36,000 for his truck — for which he had paid about $35,000 — together with one of his routes. Jung abandoned his second route without receiving anything for it. Regional Director’s Decision at 32, 38. "In these circumstances,” the Regional Director reasonably found "the evidence of only two route sales too insubstantial to support a finding of independent contractor status.” Id. at 38-39.
. See Argix Direct,
. The closest FedEx comes to contending that any driver has solicited business — and it is not very close — is its contention that one driver "asked the retailer L.L. Bean to ship him some catalogs to distribute to his customers to generate more L.L. Bean deliveries.” Regional Director’s Decision at 53 n. 33.
. The significance of designating entrepreneurialism as the emphasis of the test is not diminished by saying that it is a “principle by which to evaluate [the other common-law factors] in cases where some factors cut one way and some the other.” Op. at 7. This is particularly true because the opinion elevates no other principle to that role. Cases in which factors cut in different directions are the only cases at issue, as no determinative principle is required when all the factors point in the same direction.