In the early 80s, I had two cassettes by the Australian band Men at Work — Business as Usual, released in 1981, and Cargo two years later.
Cargo includes the single, “It’s a Mistake,” a satirically upbeat Cold War-inspired song in which a soldier tries to figure out whether the Cold War is about to turn hot. The video features too-short shorts, bad lip syncing, and old ladies hitting the band members with umbrellas on the battlefield, all of which leads to an accidental nuclear launch, triggered when an officer tries to stub out his cigar in an ashtray but hits the wrong button.
All in all — a good song, a mediocre video, and a strong commentary on the politics of the day.
A recent move by the NLRB’s General Counsel revives the “It’s a Mistake” narrative, this time in the context of independent contractor misclassification. There are no accidental nukes involved, but the move is definitely politically motivated.
If the General Counsel has her way, the Board will rule that independent contractor misclassification is an automatic unfair labor practice (ULP), even if it’s a mistake.
To reach that conclusion, the Board would have to overturn its 2019 decision in Velox Express, in which the Republican-controlled Board ruled that misclassifying a worker, by itself, is not automatically a ULP.
The GC’s actions are no surprise. In mid-2021, she issued a strategy memo announcing that one of her strategic (political) priorities was to get Velox Express overturned during her tenure. With the NLRB now featuring a 3-2 Democratic majority, she’s likely to prevail.
What does this mean for companies that use independent contractors?
It means the stakes are higher. If Velox Express is overturned, misclassification of independent contractors would likely become an automatic ULP, even if the classification was well-intentioned. Essentially, there would be strict liability for misclassification.
Traditional remedies for ULPs include back pay and reinstatement, which could mean forced reclassification as employees. The GC has been pushing to further expand the scope of available remedies because, hey, why not.
If your business is hit with a ULP and forced to reclassify workers under the NLRA, good luck trying to maintain independent contractor status under wage and hour laws or other laws.
A reversal of Velox Express, therefore, may have sweeping ramifications, making it much harder to maintain independent contractor status across a broad range of federal and state laws.
The consequences of this expected reversal will be serious — not quite on the scale of nuclear devastation, but worse than old ladies hitting you on the head with an umbrella.
© 2022 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.