Does an employer who genuinely believes that its workers are independent contractors and tells them that they are contractors and not employees, only to later find out that it was wrong, violate Section 8(a)(1) of the National Labor Relations Act (NLRA or Act)? Unions and workers’ advocates argue that such erroneous classifications/announcements should be illegal because when an employer misclassifies statutorily covered employees, they effectively convey the message to the employees that they have no rights under the law when, in fact, they do. Recognizing the importance of this issue, on February 15, 2018, the National Labor Relations Board (NLRB or Board) issued a Notice and Invitation to parties in a pending matter, Velox Express, Inc., Case No 15-CA-184006 and interested amici to file briefs to address the following question:

Under what circumstances, if any, should the Board deem an employer’s act of misclassifying statutory employees as independent contractors a violation of Section 8(a)(1) of the Act? Continue Reading An Employer’s Erroneous Announcement To Employees Declaring Them Independent Contractors Does Not, Standing Alone, Violate The NLRA

UberX and UberBLACK Drivers Are Not Employees for Purposes of the NLRA

According to the NLRB General Counsel’s Division of Advice (GC), Uber’s UberX and UberBLACK drivers are independent contractors exempt from the rights and protections of the National Labor Relations Act (NLRA), including the right to form and join unions.  Advice Memo, dated April 16 2019, Uber Technologies, Inc., Case Nos. 13-CA-163062, 14-CA-158833 and 29-CA-177483. Applying the National Labor Relations Board’s (Board or NLRB) traditional multi-factored common law agency test used to determine whether workers are employees or independent contractors and after considering all of the common law factors through the “prism of entrepreneurial opportunity” as mandated by the Board’s recent decision in Supershuttle DFW, Inc., 367 NLRB No. 75 (January 25, 2019), the GC has found that the drivers were independent contractors and not employees within the meaning of the NLRA.

The GC also considered and then discounted certain factors often relied upon to establish a worker’s employee status, finding them not dispositive indicators of employee status.  For instance, in the GC’s view, the fact that Uber received a percentage of a driver’s fare instead of charging a driver a flat fee for their use of the Company’s ride sharing platform did not support a finding of employee status because the fundamental features of the Uber system including Uber’s reliance on customer reviews to maintain quality and insure repeat business without the need for company control overcame any inference of employer control or the diminution of a driver’s entrepreneurial opportunity.  Likewise, the fact that no special skills or experience were required to qualify a driver to use the Uber platform and that the driver’s work was integral to Uber’s business did not mandate a finding of employee status, citing prior Board decisions in which individuals were held to be independent contractors, even though their services were integral to the business of the company that engaged them, given the entrepreneurial opportunity afforded them.  Continue Reading Which Are They? Independent Contractors Or Employees? Navigating The Conflicts Between State And Federal Law

In a business-friendly decision issued on January 25, 2019, the National Labor Relations Board (“NLRB” or “Board”) revised its test for determining whether putative independent contractors are exempt from coverage under the National Labor Relations Act (“NLRA”). See SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019) (“SuperShuttle”). The Board’s SuperShuttle decision affirmed a 2010 Acting Regional Director’s decision that a group of franchisee airport shuttle operators were independent contractors. In the process, the Board overturned FedEx Home Delivery, 361 NLRB 610 (2014) (“FedEx”), an Obama-era decision that, according to the SuperShuttle Board, “significantly limited the importance of entrepreneurial opportunity” to the NLRB’s independent contractor test. Given this new development, employers should expect that, at least under the NLRA, it will be easier than before to show that a worker should be classified as an independent contractor (instead of an employee). Continue Reading National Labor Relations Board Issues Decision Overruling Obama-Era Independent Contractor Test: What This Means For (Putative) Employers