NLRB independent contractor status update

Mike Zinser

Former NLRB Counsel Richard Griffin (Obama appointee), in a strategy of legal adventurism, took the position that mis-classifying someone as an independent contractor was an independent, stand-alone violation of the National Labor Relations Act.

A case brought by General Counsel Griffin pursuing his theory, Velox Express Inc., has been pending before the NLRB since 2018. The NLRB, because of the importance of the issue, invited interested parties to file amicus briefs. Significantly, President Trump's newly appointed General Counsel, Peter Robb, parted company with former General Counsel Griffin. Robb argued that misclassifying an employee as an independent contractor, standing alone, does not violate the Act. 

Unions hate independent contractor status. The National Labor Relations Act was specifically amended by the 1947 Taft-Hartley Amendments to expressly exclude independent contractors. U.S. Supreme Court decisions have made clear that the NLRB is to use the usual common law test to determine independent contractor status. No court decision has ever held it was an independent violation of the National Labor Relations Act if, after litigation, individuals were found to be employees instead of independent contractors. That issue has always been decided on a case-by-case basis.  In November 2018, I predicted that the current NLRB would reject the assertion that classifying someone as an independent contractor is independently, a stand-alone violation of the National Labor Relations Act.

On Aug. 29, the National Labor Relations Board held that companies do not violate the National Labor Relations Act solely by misclassifying employees as independent contractors. The Board majority held that a company's communication to its workers of its opinion that they are independent contractors does not, standing alone, violate the National Labor Relations Act if that opinion turns out to be mistaken. Bottom line: the decision to classify an individual as an independent contractor rather than an employee will not, by itself, subject an employer to liability under the National Labor Relations Act. After Velox Express, companies can rest easy knowing they will not have liability under the NLRA for simply misclassifying their workers.

NLRB proposes rulemaking to protect employee free choice

On Aug. 12, the NLRB majority published a Notice of Proposed Rulemaking (NPRM). The rules amend NLRB rules and regulations that govern employee choice and elections. NLRB Chairman John Ring and Members Marvin E. Kaplan and William J. Emmanuel voted to propose the amendments. The three are Republicans appointed by President Trump. Board Member Lauren McFerran (Democrat appointed by President Obama) dissented.

1. Vote and Impound Procedure replaces Blocking Charge Policy – A Blocking Charge is an unfair labor practice charge filed by a party to a representation proceeding that alleges conduct that would interfere with employees' free choice when they vote. Blocking Charges occur most often where a union is facing a decertification petition and is likely to lose the election. It has been common for a union to file an unfair labor practice charge and then claim the election cannot go forward until the charge is resolved. In the past, the NLRB has held the decertification petition in abeyance pending the determination of the unfair labor practice charge. This often delays the election for months and even years. As the Board noted in the NPRM, it "is inclined to believe, subject to comments, that the current Blocking Charge policy impedes, rather than protects, employee free choice."

The NPRM proposes to replace the current Blocking Charge policy with a vote and impound procedure that allows the election to go forward. Under this proposed change, NLRB regional directors would continue to process the election and conduct an election if the charge has not been resolved. If the charge has not been resolved before the election, the ballots would remain impounded until the board makes a final determination regarding the charge. This change in the Blocking Charge Rule will ensure that elections are conducted at a time that truly reflects employee free choice in accordance with the purposes of the National Labor Relations Act.

2. Voluntary Recognition Bar Changes – The NLRB has long recognized the lawfulness of voluntarily recognizing a union without an NLRB-conducted secret ballot election. The big issue is how long employees must wait before they can challenge majority status of a voluntarily recognized union. The period of time during which such challenges are not permitted is referred to as the "Voluntary Recognition Bar." Under current law, a voluntarily recognized union is entitled to a presumption of majority support for a reasonable period of time. The board defines a reasonable period of time as no less than six months from the parties' first bargaining session, but not longer than one year.

The NPRM states that voluntary recognition will not bar the processing of an election petition unless (1) the employer and union notify the regional office that recognition was granted; (2) the employer posts a notice provided by the regional office that informs employees that recognition has been granted and that they have the right to file a decertification or rival union petition within a 45-day window; and (3) 45 days pass after the posting without a properly supported petition being filed.

This change is designed to allow employees to express their free choice on unionization through a prompt and impartial NLRB-conducted secret ballot election.

3. Section 9(a) Recognition in the Construction Industry – Section 8(f) of the National Labor Relations Act allows construction industry employers and unions to set terms and conditions of employment in a collective bargaining agreement without showing a majority of support for the union. Section 8(f) states that an agreement signed under Section 8(f) does not bar a petition for a board election. Current law allows a construction industry union to convert an 8(f) relationship into a 9(a) relationship based on contract language alone without any other evidence of a showing of majority of support of the employees.

The NPRM reverses this current law and states that contract language alone cannot create a 9(a) relationship. Under the new rule, a union would have to show positive evidence, apart from contract language that the union unequivocally demanded recognition, and that the employer accepted it, based on a contemporaneous showing of support from a majority of employees in an appropriate unit.

This third change also reflects the current NLRB's efforts to protect employee free choice under the National Labor Relations Act.

Future predictions

I believe that employers can expect the NLRB to continue to focus on revising the existing election procedures including revisions to the "Quickie Election" rule that became effective in April 2015.

NLRB moves to respect property rights

On Aug. 23, the National Labor Relations Board reversed precedent and issued a decision that recognized the private property rights of employers. The case involved the San Antonio Symphony Musicians.  The musicians typically perform at the Tobin Center for the Performing Arts. The symphony does not own the Tobin Center. Rather, it has a license to use that facility for some of its performances. The dispute arose when symphony employees wanted to distribute handbills and leaflets on the sidewalk in front of the Tobin Center. That sidewalk is private property owned by the Tobin Center.

The Tobin Center told the musicians they could not distribute handbills or solicit on its premises. The employees then moved across the street and continued to publicize their dispute.

The musicians filed an Unfair Labor Practice charge claiming that the Tobin Center had violated their Section 7 rights because it refused to allow the distribution of handbills on their property. 

The NLRB ruled that off-duty employees of a contractor (the symphony in this case) are trespassers that are entitled to access for Section 7 purposes only if "the property owner cannot show that they have one or more reasonable alternative non-trespassory channels of communicating with their target audience. If there is at least one such channel ... the property owner will be free to assert its fundamental property right to exclude without conflicting with federal labor law."

The NLRB stated that non-trespassory means "may include newspapers, radio, television, billboards, and other media through which is transmitted the ordinary flow of information that characterizes our society."

This new case means that off-duty employees of an on-site contractor may be excluded from the worksite by the property owner in most cases. In today's world of social media and other forms of easy publication, such contractor employees would have a number of effective alternatives to trespassing on the employer's property.

L. Michael Zinser is the founding partner of The Zinser Law Firm in Nashville, Tenn. The firm, which has a heavy concentration of clients in communications media, represents management in the area of labor and employment. Zinser can be reached at (615) 244-9700 or mzinser@zinserlaw.com.