The National Labor Relations Board's General Counsel is taking the position that when an employer misclassifies a worker as an independent contractor rather than an employee, that constitutes an unfair labor practice and a violation of the National Labor Relations Act. Proper classification as between "employee" and "independent contractor" has lots of implications for purposes of taxes, worker compensation, insurance, and other matters. Now it's coming into the NLRB's cross-hairs.
General Counsel Richard F. Griffin, Jr. put out a formal memorandum on March 22 entitled "Mandatory Submissions to the Division of Advice." The memo tells NLRB Regional Directors that the GC has a list of "General Counsel's initiatives or policy concerns." When these matters pop up at the local level, the Regional Directors are instructed to get advice from headquarters. One of these is:
"Cases involving the question of whether the misclassification of employees as independent contractors violates Section 8(a)(1)."
NLRB's Regional Director in Los Angeles has filed a formal complaint alleging that Intermodal Bridge Transport violated the National Labor Relations Act because it
"misclassified its employee drivers as independent contractors, thereby inhibiting them from engaging in Section 7 activity and depriving them of the protections of the Act."
A hearing before an NLRB administrative law judge is scheduled for June 13.
The NLRB's legal theory is pretty simple: If an employer tells its employees that they are independent contractors, then the employer is really telling them that they are not allowed to organize. And that – to paraphrase the statute – interferes with, restrains, or coerces employees in the exercise of the rights guaranteed in Section 7.