Misclassification of Employees As Independent Contractors Does Not Violate NLRA, Says NLRB

The current National Labor Relations Board (NLRB) is the gift that keeps on giving to employers. Today, the NLRB issued a decision in which it held that an employer's misclassification of its employees as independent contractors does not violate the National Labor Relations Act (NLRA). Velox Express, Inc., 368 NLRB No. 61 (8/29/19). This case drew the attention of numerous unions and employer associations, many of which submitted amicus briefs.

How is misclassification of employees an issue in labor law? The classification of employees as "independent contractors" effectively removes them from the jurisdiction of the NLRA and therefore, takes away their rights under Section 7. In the event of a union organizing campaign and election, the "independent contractors" would not be part of any proposed bargaining unit nor could they vote in the election. Employers are free to discipline or dismiss independent contractors for engaging in concerted activity for mutual aid or protection (such things as bringing group complaints about employee treatment to the attention of management or talking to other employees about bringing in a union). The Obama NLRB took the position that such misclassification did violate the NLRA, but the Republican majority of the current NLRB soundly rejected that interpretation.

Keep in mind that improper classification of employees as independent contractors can still have consequences—most notably with the federal Department of Labor.