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Federal Register / Vol. 86, No. 86 / Thursday, May 6, 2021 / Rules and Regulations
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checklist.109 As the Third Circuit, for example, recently reiterated, neither the presence nor absence of any particular factor is dispositive, and courts should examine the circumstances of the whole activity, which is how courts commonly approach this analysis.110 Mechanically deconstructing court decisions and considering what courts have said about only two factors, even when courts did present their analyses in this manner, ignores the holistic approach that most courts have taken in determining worker classification.
Most significantly, the Rules assertion about the case law makes assumptions about the courts decisions that are not part of the courts reasoningthe Rule did not identify any court opinion that states that control and opportunity for profit or loss should be invariably prioritized over other factors as the Rule would have done, and there is therefore no basis to suggest that the case law endorses this core factor analysis. The Rule stated that the Departments review of case law indicates that courts of appeals have effectively been affording the control and opportunity factors greater weight, even if they did not always explicitly acknowledge doing so. 111 The Department should not have replaced the courts analyses based on the theory that they were actually setting forth an unstated, different analysis, especially when courts expressly stated that they were applying a multifactor, holistic analysis.
Ultimately, these cases were decided based on the application of the economic realities test to their facts, and different facts produce different results.
As Saleema case relied upon heavily in the Rulemade clear, courts identify the most probative facts for that particular case and rely on them in reaching an outcome, and the factual differences do not need to be great to 109 The economic realities factors ultimately assess whether the worker is economically dependent on the employer or in business for him/
herself. See, e.g., Parrish, 917 F.3d at 380 The focus is on an assessment of the economic dependence of the putative employees, the touchstone for this totality of the circumstances test. internal quotation marks and citation omitted; Keller, 781 F.3d at 807 We address each factor with an eye toward the ultimate questionthe workers economic dependence on or independence from the employer.; Scantland, 721 F.3d at 1312 the economic realities factors serve as guides, and the overarching focus of the inquiry is economic dependence.
110 See Razak, 951 F.3d at 143 citing DialAmerica Mktg., 757 F.2d at 1382.
111 86 FR 1198. The Rule further hypothesized that in those cases where the control factor and opportunity factor aligned, had the courts hypothetically limited their analysis to just those two factors, it appears to the Department that the overall results would have been the same. Id.

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produce a different result.112 The case law reflects that, rather than prioritizing certain factors as the Rule contended, courts have explicitly explained that the determination of the relationship depends on the circumstances of the whole activity. 113
While there are certainly many cases in which the classification decision made by the court aligns with the classification indicated by the control and opportunity for profit and loss factors, the Rule concedes that there are cases in which the classification suggested by the control factor did not align with the workers classification as determined by the courts.114 The Rule also stated in a footnote, regarding the opportunity factor, that this is not to imply that the opportunity factor necessarily aligns with the ultimate classification, but rather that the Department is not aware of an appellate case in which misalignment occurred. 115 The Rule did not, however, identify any cases stating that the opportunity for profit or loss factor should be determinative or more probative of a workers classification than other factors. Additionally, it is necessarily the case that if any two factors of a multifactor balancing test point toward the same outcome, then that outcome becomes increasingly likely to be the ultimate outcome;
however, there was no analysis provided in the Rule regarding whether a different combination of factors would yield similar results.
While the Department is always seeking to improve clarity for workers and employers, the Rules formulaic and mechanical weighting of factors is precisely what courts have cautioned against for decades in applying an economic reality analysis.116 This is 112 Saleem, 854 F.3d at 149 We conclude only that assessing the totality of the circumstances here in light of each Silk factor, undisputed evidence makes clear as a matter of law that these Plaintiffs were not employees of these Defendants. In a different case, and with a different record, an entity that exercised similar control over clients, fees, and rules enforcement in ways analogous to the Defendants here might well constitute an employer within the meaning of the FLSA. emphasis in original.
113 Rutherford Food, 331 U.S. at 730.
114 86 FR 1197.
115 Id. at 1197, n.44.
116 The Supreme Court has been clear that there is no single factor that is determinative, see Rutherford Food, 331 U.S. at 730, nor is there any mathematical formula to be applied, Antenor v.
D & S Farms, 88 F.3d 925, 933 11th Cir. 1996.
Furthermore, courts have found economic dependence under a multitude of circumstances where the alleged employer exercised little or no control or supervision over the putative employees. Antenor, 88 F.3d at 933 citations omitted. Courts of appeals have cautioned against any mechanical application of the economic
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because a true balancing test that properly considers the totality of circumstances by definition does not mechanically elevate certain factors, and doing so would impermissibly narrow the Acts broad definition of employ. For example, if facts relevant to the control and opportunity for profit or loss factors both point to independent contractor status for a particular worker but weakly so, those factors should not be presumed to carry more weight than stronger factual findings under other factors e.g., the existence of a lengthy and exclusive working relationship under the permanence factor, the performance of work at the very heart of the potential employers business under the integral factor, etc.. Courts and the Department may focus on some relevant factors more than others when analyzing a particular set of facts and circumstances, but that does not mean that it is possible or permissible to derive from these fact-driven decisions universal rules regarding which factors deserve more weight than the others when the courts themselves have not set forth any such universal rules despite decades of opportunity.
Further, the Rules reliance on how courts assessed the control and opportunity for profit or loss factors in the past is inapposite here, because, as discussed below, the Rule would have significantly altered both of these factors, changing what may be considered for each. For example, the Rule would have downplayed the employers right to control the work and recast the opportunity for profit or loss factor as indicating independent contractor status based on the workers initiative or investment.117 In other words, even if courts had generally relied upon control and opportunity for profit or loss in prior cases, the new framing of these factors, as redefined in the Rule, nevertheless sets forth a new analysis without precedent.
Accordingly, the Department agrees with the view expressed by numerous commenters that the Rules elevation of the control and opportunity for profit or loss factors is in tension with the language and purpose of the Act as well as the position, expressed by the Supreme Court and in appellate cases from across the circuits, that no single factor is determinative in the analysis of reality factors. See, e.g., Saleem, 854 F.3d at 139.
Rather, each factor is a tool used to gauge the economic dependence of the alleged employee, and each must be applied with this ultimate concept in mind. Hopkins v. Cornerstone America, 545 F.3d 338, 343 5th Cir. 2008.
117 See 86 FR 124647 795.105d1iii, 795.110.

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