NLRB to Decide if IC Misclassification is an Unfair Labor Practice

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From the April and May 2018 Independent Contractor Misclassification and Compliance News Update, Richard Reibstein, reports that the Nation Labor Relations Board (NLRB) is considering whether misclassifying workers as independent contractors violates the National Labor Relations Act. Richard writes:

The NLRB has received numerous Amici Curiae (Friends of the Court) briefs regarding under what circumstances, if any, the Board deem an employer’s act of misclassifying employees as independent contractors to be a violation of Section 8(a)(1) of the National Labor Relations Act (NLRA). As we noted in our September monthly news update, the Administrative Law Judge (ALJ) in Velox Express, Inc., 15-CA-184006 (Sept. 25, 2017), decided that misclassification alone can constitute an unfair labor practice under the NLRA. In Velox, an unfair labor practice charge was filed by a courier / driver against Velox, a medical courier service, alleging IC misclassification. The ALJ determined that the drivers were employees and not independent contractors because Velox controlled how its drivers carried specimens, directed how they should ensure that pickups were complete and prompt, and prevented drivers from finding their own substitutes. The ALJ also concluded that Velox committed an unfair labor practice in violation of Section 8(a)(1) due to the misclassification of the workers as ICs, and restrained and interfered with their ability to engage in protected activity under Section 7 of the NLRA.

The Board issued a Notice and Invitation on February 15, 2018 for interest groups to share their views with the NLRB on the above misclassification issue. In response to the NLRB’s invitation, a joint brief was filed by Massachusetts, Pennsylvania, Connecticut, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Virginia, and Washington in support of the General Counsel’s request to affirm the ALJ’s decision that IC misclassification alone constituted an unfair labor practice. The States “urge[d] the Board to consider the threat misclassification poses to the States, their treasuries, and their residents.” They also argued that IC misclassification not only results in the denial of the most basic statutory protections, such as the right to be paid a minimum wage and to be paid on time, but it also denies workers the right “to form unions, collectively bargain and engage in concerted activity in the workplace for mutual aid and protection without fear of reprisal.”

A joint Amicus Curiae brief was also filed by the Coalition for a Democratic Workplace and U.S. Chamber of Commerce, taking the position that the Board should decline to revisit or revise the existing standard – that both misclassification and some additional unfair labor practice are required before finding a violation of the Act – and it should reject the “novel theory” that IC misclassification alone is enough. They also argued that “the concept of an unfair labor practice requires that an employer take some additional steps beyond simply taking a legal position regarding the classification of a worker in order for liability to attach under the Act.” They further noted that in December 2017, current NLRB General Counsel Peter Robb formally rescinded a previously-issued guidance in support of a “misclassification-as-violation” theory. Velox Express, Inc., 15-CA-184006 (Sept. 25, 2017).

In our August 30, 2016 blog post entitled NLRB General Counsel Creates a “Misclassification-Plus” Unfair Labor Practice, we commented that the NLRB’s General Counsel not only was seeking to expand the law by alleging that IC misclassification alone would violate the NLRA, but in the process seemed to be overlooking Section 8(c) of the NLRA. That time-honored “free speech” section provides: “The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.” It is likely, given the current composition of the NLRB, that the Board will rule that the mere misclassification of an individual as an IC is not an unfair labor practice.

Source: Pocket: April and May 2018 Independent Contractor Misclassification and Compliance News Update

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