Independent Contractors

At the end of 2017, the NLRB’s General Counsel Peter Robb took steps to undo actions undertaken by his predecessor, Richard Griffin, to drastically change the interpretation of independent contractor status in the workplace. Robb rescinded an August 2016 Advice Memorandum, in which Griffin took an overly expansive view of who is an employee under the National Labor Relations Act (NLRA) and in doing so called into question the legitimacy of many independent contractor relationships. Importantly, the memo relied on a case that has since been overturned by a US Court of Appeals. The Griffin memo also drastically deviated from the Board’s longstanding position by claiming for the first time in the agency’s 80-plus year history that the unintentional misclassification of workers was in and of itself a violation of the Act’s Section 7 rights to act collectively.

Additionally, on December 1, 2017, Robb issued Memorandum GC 18-02 instructing Regional Offices to submit for review to the NLRB’s Division of Advice all cases involving “significant legal issues.” The memo specifically included cases that involve the argument that the misclassification of employees as independent contractors is a violation of the NLRA.

While we are encouraged by General Counsel Robb’s actions, CDW continues to litigate this issue in the courts. One case concerning misclassification of independent contractors is currently pending in the court system. Velox Express deals with an employee who claims she was wrongfully discharged when she protested against her classification as an independent contractor. The presiding Administrative Law Judge ruled, without any substantive analysis, that she was in fact an employee and adopted the policy in the Griffin memo. The case was appealed to the NLRB and provides President Trump’s Board with its first opportunity to rule on the General Counsel’s theory.

In Chamber of Commerce v Seattle, the Chamber of Commerce filed suit against the city of Seattle over an ordinance that would allow for-hire drivers classified as independent contractors – like those driving for ridesharing companies – to unionize and collectively bargain. The Chamber challenged the ordinance on the grounds that it is preempted by federal labor law, explaining that Congress did not give independent contractors the right to organize or collectively bargain under the NLRA. The court ruled in favor of Seattle, arguing that Congress’ exclusion of independent contractors in the NLRA points not toward preemption but to an indifference that permits state regulation. The Chamber appealed the ruling to the Ninth Circuit Court of Appeals, which granted an injunction against the ordinance pending appeal. On May 11, 2018, the Ninth Circuit, in a unanimous opinion, sided with the Chamber and ruled that the City’s ordinance is unlawful as it violates antitrust laws. Unfortunately, however, the Court also ruled that Seattle’s ordinance was not preempted by the NLRA. Whether Seattle and the State of Washington make a second attempt in this area remains to be seen. We will be keeping a close eye on these developments moving forward.

CDW filed briefs in these cases; both of which can be found on our resources page. CDW will continue to fight against unwarranted attacks on independent contractors and the employers who rely on them.

Independent Contractors Fact Sheet

Please see our resources page for more information on this issue.