Seyfarth Synopsis: NLRB claims that employers violate Section 8(a)(1) of the NLRA by misclassifying employees as independent contractors, thereby restraining and coercing employees in the exercise of their rights guaranteed under Section 7 of the Act.
The NLRB’s Regional Director in Los Angeles has issued a complaint against Intermodal Bridge Transport alleging that the misclassification of truck drivers as “independent contractors” itself constitutes a violation of the National Labor Relations Act. The complaint states that such a misclassification “inhibit[s] them from engaging in Section 7 activity and depriv[es] them of the protection of the Act.” Section 7 provides that “employees,” as opposed to independent contractors, have the right to self-organize and bargain collectively.
This novel interpretation of Section 7 is no doubt a reaction to NLRB General Counsel Richard Griffin’s March 22, 2016 Memorandum GC 16-01 to all Regional Directors requiring them to submit to his Division of Advice cases that involve “the General Counsel’s initiatives and/or priority areas of the law and labor policy.” Included in his list of “mandatory submissions” are “cases involving the employment status of workers in the on-demand economy,” and “cases involving the question of whether the misclassification of employees as independent contractors violates” the NLRA.
It is clear from the complaint where the NLRB stands on this “question.” It states: “By the conduct described above … Respondent has been interfering with, restraining, and coercing employees in the exercise of the rights guaranteed in Section 7 of the Act.” And given the current Board’s strong ties to labor, it would not be surprising to see this argument prevail.
Determining whether an employee is an independent contractor, as one federal court recently put it, is a question of “economic reality,” involving a multi-factorial analysis with “no bright-line rules or precise formulas.”[1]
The case is Intermodal Bridge Transport v. International Brotherhood of Teamsters, Case No. 21-CA-157647. A hearing will take place before an administrative law judge on June 13, 2016 in Los Angeles.
[1] Hernandez v. Fresh Diet, Inc., No. 12-CV-4339 ALC JLC, 2014 WL 5039431, at *2 (S.D.N.Y. Sept. 29, 2014).
