NLRB TAKES POSITION THAT MISCLASSIFYING EMPLOYEES AS INDEPENDENT CONTRACTORS VIOLATES LABOR ACT

Misclassification cases in which it is alleged that independent contractors are actually employees have been one of the most important and heavily-litigated areas of employment law in recent years.  Many of the lawsuits are filed under the Fair Labor Standards Act or comparable state laws and seek wage and hour and other protection for workers.  In a recent twist, the NLRB has become involved in these issues. 

Last April, the NLRB Regional Director in Los Angeles issued an unfair labor practice complaint against Intermodal Bridge Transport contending that the company treated its drivers at the port as contractors in order to stop the Teamsters’ union from organizing them.  Pacific 9 Transportation, Inc., 21-CA-150875.  NLRB General Counsel Richard Griffin a month earlier had issued a memo that the NLRB is cracking down on worker misclassification and urging NLRB regional directors to refer cases involving misclassification claims to Washington for review.  Previously there has been little or no NLRB precedent on whether the intentional misclassification of workers as independent contractors interferes with worker’s rights to organize under the Labor Act.  More recently, in August, the General Counsel issued an advice memorandum directing the NLRB regional directors to treat employee misclassifications as a violation of the Labor Act.

Editor’s Note: These developments create other reasons for employers to be careful in their use of independent contractors, particularly in the careful drafting of their independent contractor agreements, and the practices under such agreements.  In essence, the implication of the recent NLRB developments is to create a "federal case" out of each independent contractor agreement.  As a practical matter, it is likely that some type of union involvement would generate such claims, since the Labor Act permits only employees to join unions.