Monday, September 2, 2019

Velox Express: Does merely misclassifying employees as independent contractors violate labor law?

Samuel Gompers Monument
In Velox Express, Inc., the National Labor Relations Board concluded that Velox Express violated the National Labor Relations Act in firing a driver for complaining that she and other drivers were misclassified as independent contractors rather than employees, but the Board also concluded that the misclassification was not a standalone violation of the NLRA.

In her dissent, Board Member Lauren McFerran not only disagreed about whether a misclassification decision violates the NLRA, she also contended that the majority should not have addressed that issue. In doing so, however, McFerran seems to have shot herself in the foot.

Not surprisingly, the Board, has never had occasion to address the "pure" misclassification issue taken up today. It is hard to imagine how a case limited to that issue would arise, unless an employee sought the equivalent of a declaratory judgment from the Board—the Board's determination of employee status—before engaging in Section 7 activity. Far more likely are unfair labor practice cases triggered by an employer's application or enforcement of misclassification against employees—its denial to them of rights under the Act that are properly available to employees. That fact is demonstrated by the examples cited above. And this case, too, illustrates the point, as it does not involve misclassification without more, but rather misclassification with more: an employer's reprisal against an employee for concertedly challenging the Respondent's misclassification of its drivers.
If, as McFerran contends, misclassification never comes up on its own but only in the context of an application or enforcement of a misclassification decision, it's hard to understand how someone could conclude that misclassification actually has a chilling effect. 
On the other hand, if a misclassification decision does have a chilling effect, then why wouldn't McFerran want the Board to determine whether it is a standalone violation? 

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.