NLRB’s General Counsel Addresses Misclassification of Workers

The classification of workers as employees or independent contractors continues to be fertile ground for litigation. Under the National Labor Relations Act (“NLRA”), independent contractors are not “employees” and are therefore not afforded the protections of the law, including the right to form a union. Moreover, independent contractors generally do not have other non NLRA-protections, such as workers’ compensation or unemployment insurance.

In 2019, the National Labor Relations Board (“NLRB”) held that misclassifying employees as independent contractors, without more, did not violate the NLRA. In Velox Express, Inc. & Jeannie Edge, Jeannie Edge, a driver for Velox Express, Inc., was fired for raising group complaints about the conditions of employment. Drivers for the company were required to sign independent contractor agreements, but Edge began discussing work-related issues with other drivers and voiced concerns that company policies seemed inconsistent with their classification as independent contractors. Although Edge, in a subsequent complaint, argued that Velox drivers were “employees” covered under the NLRA, Velox argued that they were independent contractors and thus not protected. Ultimately, the Board agreed that the Velox drivers were “employees,” and that Velox violated the NLRA when it fired Edge for raising group complaints about the job. Because Velox fired Edge for her concerted activity, Velox violated the Act, and the employer was required to reimburse her for loss of earnings and benefits. But if Edge had not been fired – if Velox had merely misclassified employees as independent contractors – a majority of the NLRB held that the employer would not have violated the NLRA.

Very recently, however, the NLRB’s General Counsel now seeks to challenge that holding. The NLRB GC has issued a complaint against five trucking, warehouse, and logistic companies, alleging that their misclassification of drivers as independent contractors – without more – does violate the NLRA. Through the complaint, the GC seeks an order forcing the companies to reclassify drivers as employees and to pay them consequential damages suffered because of their misclassification – among other remedies. Although the NLRB has not yet issued its decision, this action continues the recent trend of further litigation regarding the classification of workers in the wake of the growing “gig” economy.

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