Is Independent Contractor Misclassification, By Itself, an Unfair Labor Practice? (2018 update)

Clock independent contractor misclassificationAs Bob Dylan would say, The times they are a-changin’.  Upon being sworn in as new General Counsel of the NLRB, Peter Robb issued a Memorandum indicating his intent to reconsider a broad range of controversial positions taken by the Board and by his predecessor, Richard Griffin.

Among these positions is an issue we wrote about here, just a couple of months ago. The issue is whether the act of misclassifying a worker as an independent contractor could, by itself, be deemed an unfair labor practice. As explained in that blog post, an Administrative Law Judge had ruled that misclassification alone could be considered an unfair labor practice. The ALJ’s explanation went like this:

1. Employees have rights under the NLRA.

2. Misclassifying a worker as an independent contractor instead of an employee is equivalent to telling an employee that he/she is not an employee.

3. Telling an employee (who was misclassified as an independent contractor but really is an employee) that he/she is not an employee is the same as denying that employee access to the benefits of the NLRA and the rights that law grants to employees.

Peter Robb’s Memorandum calls that position into question and identifies it as one of the specific policy interpretations he wishes to revisit.

As General Counsel, Robb will be the person who determines which cases the Board prosecutes. The Board itself will still make the decisions, but Robb plays a key role in deciding which cases come before the Board. If Robb wants to revisit this issue, he can bring this issue before the Board.

With the Board now set to enjoy a Republican majority,* the Board is likely to align itself with Robb on this issue, not with the ALJ whose decision I wrote about in October. We’ll see. None of this is a done deal, but the Robb Memorandum indicates an intent to undo many of the decisions the Board has announced during the past eight years. In fact, several of these issues were addressed by the full Board in a burst of activity the week of December 11-15.

This is an encouraging development for businesses using independent contractors, especially those who have some concern about whether their contractors are properly classified.

To borrow another Dylan song title, Robb’s Memorandum signals his plan to provide business owners Shelter from the Storm.

So… as of now, can independent contractor misclassification, by itself, be considered an unfair labor practice? Yes. But in a few months? Don’t count on it. We can expect the Board, when it gets an opportunity to re-examine this question, to say no.

*Republican NLRB member Philip Miscimarra stepped down when his term expired on December 16, 2017, which temporarily leaves the Board deadlocked with two Republicans and two Democrats until a third Republican NLRB member is nominated by the President and approved by the Senate, which may take several months.

For more information on independent contractor issues and other labor and employment developments to watch in 2018, join me in New York on Jan. 30, Los Angeles on Feb. 27, or Cincinnati on March 28 for the 2018 BakerHostetler Master Class on Labor Relations and Employment Law: A Time for Change. Attendance is complimentary, but advance registration is required. Please email me if you plan to attend, tlebowitz@bakerlaw.com, and list my name in your RSVP so I can be sure to look for you.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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