National Labor Relations Board Administrative Law Judge Arthur J. Amchan had ruled in Velox Express, Inc. that misclassification of employees as independent contractors violates Section 8(a)(1) of the National Labor Relations Act. 2017 NLRB LEXIS 486 (Sept. 25, 2017). Now the case is before the NLRB, and the Board has invited interested parties to file amicus briefs to address “under what circumstances, if any, the Board should deem an employer’s act of misclassifying statutory employees as independent contractors a violation of Section 8(a)(1) of the National Labor Relations Act.” Briefs must be submitted on or before April 16, 2018.
Velox Express operates a courier service. In 2016, Velox employed what it considered independent contractors to drive to hospitals and other medical facilities to collect medical samples for diagnostic laboratories. Jeannie Edge briefly worked as a driver for Velox on an independent contractor basis until Velox terminated her contract in August 2016. Edge filed an unfair labor practice (ULP) charge with the NLRB. In an unfair labor practice complaint, the General Counsel alleged that Edge was an employee, not an independent contractor, and that Velox had violated Section 8(a)(1) of the Act by the mere act of misclassifying its drivers as independent contractors.
The Board reviews multiple factors, such as extent of control by the employer, in determining whether an individual is an employee or independent contractor. If an individual is classified as an independent contractor, rather than an employee, the individual is not protected by Sections 7 and 8 of the Act. After reviewing the factors, Judge Amchan determined that the drivers were employees. With almost no analysis, he then found that:
By misclassifying its drivers, Velox restrained and interfered with their ability to engage in protected activity by effectively telling them that they are not protected by Section 7 and thus could be disciplined or discharged for trying to form, join or assist a union or act together with other employees for their benefit and protection.
Velox then appealed that decision to the Board.
Judge Amchan’s ruling, if upheld by the Board, has serious policy considerations for employers. Businesses that employ individuals who they classify as independent contractors could face unfair labor practice liability if the classification is mistaken. It behooves interested employers to give the Board their views.