Hunton Employment & Labor Perspectives

This summer, the National Labor Relations Board (“NLRB” or “Board”) issued several pro-employer decisions.  Just last month, the NLRB issued two key decisions for employers, which are discussed below.

Worker Misclassification Not a Violation of the NLRA

 As we previously reported, the Board previously invited interested parties and amici to submit briefs in the case of Velox Express, Inc. (15-CA-184006) to address under what circumstances, if any, the Board should deem an employer’s misclassifying statutory employees as independent contractors as a violation of the National Labor Relations Act (“NLRA”).

In a split decision, the Board has now answered that question.  In Velox Express Inc., the Board determined that a medical device transportation company, Velox Express did not violate the NLRA solely by misclassifying its employees as independent contractors.

The worker in question was classified as an independent contractor delivery driver until her contract was terminated in August 2016.  The Board’s then-General Counsel filed an unfair labor practice charge with the Board, claiming that the worker was an employee, not an independent contractor, and that the company had violated the NLRA: (1) by discharging her for engaging in protected concerted activity; and (2) by misclassifying its drivers as independent contractors.  Unlike employees, independent contractors cannot unionize.  In order to discourage misclassification for purposes of union-avoidance, the Obama-appointed General Counsel argued that misclassification violates the NLRA by interfering with, coercing, or restraining employees’ rights to organize by misclassifying them as independent contractors.  An administrative law judge agreed with the Obama Board’s position, ruling that the worker was an employee and that the company misclassified its couriers and thus violated the NLRA.

On appeal, however, the Board held that misclassifying employees as independent contractors does not—“in and of itself”—violate the NLRA.  The Board reasoned that the mere misclassification of workers does not “inherently threaten” or otherwise interfere with those workers’ right to organize or engage in “concerted activities.”  As the Board explained, “[e]mployees may well disagree with their employer, take the position that they are employees, and engage in union or other protected concerted activities.”   The Board was quick to note, however, that “[i]f the employer responds with threats, promises, interrogations, and so forth, then it will have violated [the Act], but not before.”

The Board decision is good news for employers and protects against unfair labor practice charges resulting from an inadvertent misclassification of employees as independent contractors.

Employers Can Remove Organizers from Parking Lot

In Kroger Limited Partnership I Mid-Atlantic, the Board ruled that a supermarket in Virginia did not violate the NLRA by removing union organizers from its parking lot.

In doing so, the Board overturned its previous standard, in which it held that an employer illegally discriminates against labor unions by preventing them from demonstrating or soliciting customers on the employer’s premises if the employer allows other groups, including charitable organizations, to do so.

The Kroger case involved a union representative who solicited Kroger customers in its parking lot to sign a petition protesting Kroger’s decision to close the store and to transfer union members to stores outside the area.  Kroger treated this as trespass and responded by calling the local police and asking them to stop the Union’s solicitation.  An administrative law judge found that Kroger violated the NLRA under the then-applicable standard.

In the Kroger case, the Board determined that the previous standard “improperly stretched the concept of discrimination well beyond its accepted meaning.”  According to the Board, solicitations from charitable organizations differ fundamentally from union activity.  Thus, the Board held that employers only discriminate if they bar union demonstrations but allow “comparable organizational activities by non-labor groups, such as membership drives by fraternal societies and religious organizations.”  The Board’s Kroger decision is another victory for employers who wish to allow some types or organization on their premises but do not want to open up their property and customers to union solicitation.