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Misclassifying Workers as Independent Contractors Does Not Violate NLRA

    Pennsylvania Labor & Employment Blog

    Misclassifying Workers as Independent Contractors Does Not Violate NLRA

    By Adam Santucci on 

    POSTED IN EMPLOYER LIABILITYWORKPLACE TRENDS

    A lot of times, determining whether a worker is an independent contractor or an employee is tough.  Different laws have different standards, and government agencies and the courts often apply different tests in addressing this question.  Under any test, the analysis is highly fact intensive, and the consequences of misclassification can be steep.

    Luckily, the National Labor Relations Board recently made clear that the misclassification of a worker as an independent contractor, when the worker is really an employee, is not in and of itself a violation of the National Labor Relations Act.

    In Velox Express, Inc., the Board held that Velox, a medical courier service, misclassified its drivers as independent contractors.  The Board held that the drivers were employees under the Act. However, the Board refused to adopt an Administrative Law Judge’s separate finding that the misclassification alone violated the Act.  The Board found that conclusion was simply a “bridge to far.”

    Section 8 of the Act prohibits employers from interfering with employee rights under the Act, and from coercing or restraining employees from exercising those rights.  The ALJ had found that misclassification dissuaded employees from exercising their rights under the Act.  The ALJ ruled that misclassification chilled employee exercise of protected activities, and therefore, violated Section 8 of the Act.

    But the Board found that a misclassification was not the type of inherently threatening or coercive conduct that has historically been found to violate the Act. Essentially, absent additional conduct on the part of the employer, a misclassification alone is not enough to deter employees from exercising their rights.

    Interestingly, the Board agreed with the ALJ that the employer’s decision to discharge a driver who raised concerns about how the drivers were classified was a violation of the Act. As noted above, the Board agreed that the drivers were really employees and not contractors.  The Board further agreed that the employer took action to discharge the driver because she engaged in activities protected by the Act, which is unlawful.

    The Board’s decision is certainly a welcome relief for employers who engage independent contractors, especially in the transportation industry.  However, it is also a warning that while misclassification alone may not warrant consequences under the Act, if a worker is misclassified, liability under applicable labor and employment laws may await.  As this case demonstrates, misclassified independent contractors will be protected by the Act.