## Facts

- United Insurance used “debit agents” to sell and service the company’s insurance policies within assigned territories (“debits”), including collecting premiums.
- A union sought to represent the agents; the NLRB’s Regional Director classified them as “employees” under NLRA § 2(3) and directed a representation election.
- After the union won the election, United Insurance refused to bargain, asserting the agents were independent contractors excluded from NLRA coverage.
- The NLRB found the refusal to bargain was an unfair labor practice and ordered the company to bargain, concluding the agents were employees.
- The Seventh Circuit denied enforcement, reclassifying the agents as independent contractors.
- The Supreme Court granted review to determine whether the Board’s employee classification should stand.

## Issues

1. Whether NLRA § 2(3)’s exclusion of “independent contractors” requires application of common-law agency principles to distinguish employees from independent contractors.
2. Whether substantial evidence supported the NLRB’s determination that United Insurance’s debit agents were employees rather than independent contractors.
3. Whether a reviewing court may set aside the NLRB’s reasonable classification by reweighing close, fact-intensive considerations.

## Decision

- The Supreme Court reversed the Seventh Circuit and upheld the NLRB’s determination that the debit agents were employees under the NLRA.
- The Court held that Congress incorporated the common-law agency test to define “employee” and to distinguish excluded independent contractors.
- The Court concluded the Board’s application of the common-law factors was supported by substantial evidence and therefore could not be displaced by judicial reweighing of the record, even if the classification question was close.

## Legal Principles

- NLRA “employee” status, as limited by the statutory exclusion for “independent contractors,” is determined by common-law agency principles (a multifactor inquiry).
- No single factor is controlling; the relationship must be assessed based on the totality of the circumstances reflected in the common-law factors.
- Contractual labels (e.g., calling workers “independent contractors”) are relevant but not dispositive; the actual working relationship governs.
- Courts review the NLRB’s classification determinations under the substantial-evidence standard and may not substitute their judgment when the Board’s conclusion is a permissible one on the record.
- Factors supporting employee status may include integration into the employer’s regular business, meaningful supervision and rules, an ongoing and indefinite relationship, and limited independent entrepreneurial operation or risk.

## Conclusion

The Court confirmed that the NLRA’s employee/independent-contractor boundary is governed by common-law agency factors and that, where substantial evidence supports the NLRB’s reasonable application of those factors, appellate courts must enforce the Board’s resulting bargaining order.


NLRB v. United Ins. Co. of Am., 390 U.S. 254 (1968)