NLRB Ruling Eases Path for Employers Using Contracted Workers

National Labor Relations Board rules that entrepreneurial workers are independent contractors not employees.

January 29, 2019

WASHINGTON, D.C. - A 2014 NLRB decision was overruled last Friday, making it easier for employers to show their workers are independent contractors who can’t unionize. A Law360 article says that the decision “will make workers’ entrepreneurship a pillar of the board’s employment classification test.” In light of the many independent contracting relationships that have become commonplace across industries nationwide, including the convenience and fuel retailing industry, the decision will have a broad impact.

NLRB board members nixed the 2014 ruling, which was based on a FedEx Home Delivery case that concerned an organizing drive by FedEx drivers in Hartford, Connecticut. The majority of members today said that the ruling gave “short shrift to workers’ entrepreneurship.”

Law360 says that NLRB Republican board members John Ring, Bill Emanuel and Marvin Kaplan, all of whom were appointed by President Donald Trump, accused the Democratic majority in FedEx of perverting the board’s long-standing common-law test for deciding whether workers are employees. The National Labor Relations Act empowers employees to collectively bargain with their employers but doesn’t do so for independent contractors.

“The interesting thing about the NLRB test is that it only will apply when a group of workers decides that they want to unionize,” said Hugh Murray, an attorney who advises businesses on labor issues. “That doesn’t happen that often, frankly, among traditional employees, and it’s even more rare among people who sign contracts saying they’re independent contractors.” He added that it will also stump unions’ future efforts to organize drivers for Uber, Lyft, FedEx or others that classify their workers as contractors.