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NLRB Opens Front In Contractor Battle

Richard Griffin, General Counsel of the National Labor Relations Board, opened a new front in the war against independent contractors by directing his regional directors to assert that contractor status is by its very existence an unfair labor practice.

Last year the head of the Labor Department’s Wage and Hour Division made a similar assertion. Unions and their allies in federal, state and even some city governments embrace the notion that independent contractors are in reality exploited employees by another name.

The NLRB general counsel had instructed the board’s regional directors to tackle employee misclassification issues in another memo he issued in December 2015.

Griffin amplified his position in a memo issued in late August regarding a case that involves Pacific 9 Transportation, a port drayage carrier serving ports in Southern California.

Earlier this year Pac 9 agreed to Teamsters representation of its drivers. Responding to a lawsuit filed earlier by the Teamsters, a judge ordered the company to pay drivers $7 million in back pay and unpaid unemployment insurance.

One day after the NLRB general counsel issued his new directive with Pac 9 at the center, the company filed for bankruptcy protection because it can’t afford to pay the court judgement obtained by the Teamsters for Pac 9’s estimated 75-100 drivers.

The memo also directs the regional director to order Pac 9 cease referring to the drivers as independent contractors; rescind any portions of its agreements with drivers that purport to classify them as independent contractors; and to post a notice to that effect on its premises.

In other words, the general counsel of the NLRB seeks to expand the purview of labor policy to dictate the worker classification decisions of employers,” says attorney Adam J. Smiley of the law firm of Seyfarth Shaw, summing up the memo.

“This novel theory will surely be challenged,” Smiley observes, calling it tenuous and untested.

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