Unfair Labor Practices

NLRB (Logo)By: Joshua M. Henderson, Esq.

Seyfarth SynopsisA recent federal appeals court decision makes it even more difficult for an employer to withdraw recognition from a union that has lost majority support.  Employers need to be aware of the possibility of union “gamesmanship” when deciding how to proceed.

An employer that withdraws recognition from a union as the exclusive bargaining agent of its employees does so, as the Board and Courts say, “at its peril.” It’s a risky move, one that requires objective evidence that a union has actually lost the majority support among the employees it represents.  And the employer must be correct about the actual loss of majority support or it will face an unfair labor practice charge for refusing to bargain with a union.  Consider it a form of strict liability in the labor-relations context.  But what if the employer has objective evidence that a union has lost majority support, and then the union regains the majority support before the employer withdraws recognition?  Also, if an employer is found to have violated the law under those circumstances, what is the remedy when the union deliberately did not disclose to the employer it had regained majority status?

In Scomas of Sausalito v. NLRB (March 7, 2017), the D.C. Circuit considered these two questions.  The Court upheld the unfair labor practice charge against the employer that withdrew recognition without knowing that the union had regained majority status.  The Court observed that the employees had suffered from “an extended period of Union neglect.”  Thus, the union had not sought to bargain with the employer for over a year, and held no meetings and provided no information to its members for more than a year, but continued to collect dues from them all the while.  Perhaps not surprisingly, a majority of employees notified the employer in writing that they no longer wanted the union to represent them.  Two days after being confronted with this news, a union representative notified the employer that the union wanted to negotiate a new collective bargaining agreement, and worked behind the scenes to persuade six employees to revoke their signatures on the decertification notice that had been given to the employer.  Yet the union never told the employer that these signatures had been revoked, or that (in light of the size of the bargaining unit) this meant the union had in fact not lost majority support.  The Court decried the union’s “gamesmanship” in not informing the employer, but held that under the Board’s Levitz Furniture test (which the Court had approved of in an earlier case), the employer assumed the risk that it was wrong in evaluating majority support.  Because the employer was wrong, it could not lawfully withdraw recognition.

In answer to the second question, however, the Court reversed the Board’s decision that a “bargaining order” was the appropriate remedy. Bargaining orders are reserved for flagrant, deliberate unfair labor practices.  In the Court’s view, the employer was not acting in bad faith when it withdrew recognition from the union.  The evidence showed that the employer did not act in haste.  Rather, it took steps to ensure that the signatures on the petition delivered to it matched those on the employees’ payroll records.  Moreover, the signatures that remained on the petition after the revocation comprised 42 percent of the bargaining unit.  That exceeds the 30 percent threshold for directing an election, whether filed by a union, an employer, or an employee.  The disaffected employees also had filed a decertification election petition with the Board, but withdrew it after their employer withdrew recognition from the union.  Under the circumstances, the Court rejected the Board’s argument that an election was not an appropriate alternative remedy.

Takeaway for Employers:  Under the Board’s current test (which may or may not be reconsidered by a new Republican-majority Board), an employer may withdraw recognition from the union only when there is an actual loss of majority support for the union; as a practical matter, the employer must be absolutely certain that more than half of the employees in the bargaining unit no longer want the union to represent them.  Even then, the union may be able to undermine the employer’s basis for withdrawal and place the employer’s decision in jeopardy.  When faced with an apparent loss of majority support for a union, an employer should seriously consider choosing the safer option of filing an RM petition (a management election petition) with the NLRB to allow the employees an opportunity to vote on whether to oust the union in a formal election overseen by the Board.  [Good-faith uncertainty of majority status could, in some circumstances and under the Board’s current standard, support an internal poll of employees as to their support for the union, but polling requires fastidious attention to procedural safeguards and is fraught with legal risk as well.]

 

Striking  By: Brian Stolzenbach, Esq.

Seyfarth Synopsis: Employers should not presume that they are permitted to stop paying for employees’ medical benefits once they go out on strike. In a 2-1 decision, the NLRB recently held that — at least in some circumstances — medical benefits may be “accrued” simply by virtue of being employed.  If so, then an employer may not stop those benefits during strike.

Nearly 70 years ago, the NLRB confirmed that an employer has no obligation to finance a strike against itself by paying wages to employees during a strike. See General Elec., 80 NLRB 510 (1948).  No one ever said that strikes are supposed to be painless for strikers or that they entitled to be paid not to work.  Decades after the General Electric decision, it has become very common for employers to provide their employees with medical insurance, in addition to wages, as a form of compensation.  Many (perhaps most) employers assume that the old axiom extends to this form of compensation, as well:  they believe they can never be required to continue paying for their employees’ medical insurance during a strike.  Alas, in Hawaiian Telcom, Inc., 365 NLRB No. 36 (Feb. 23, 2017), the NLRB held otherwise.  Over an impassioned dissent by Acting NLRB Chairman Phil Miscimarra, the two Democrat Members of the Board concluded that this is actually a question of contract interpretation.  Reviewing the collective bargaining agreement that had expired prior to the strike, the NLRB observed that the contract provided medical insurance for all employees covered by the agreement — with no exceptions, save for termination of employment.  Strikers, of course, have not terminated their employment, so the NLRB decided that medical benefits could not be stopped during the strike, even though the collective bargaining agreement had expired.

What does this mean for employers? At the very least, it means that they should be very familiar with the precise terms of the collective bargaining agreement and other documents (benefit plan documents, SPDs, etc.) that govern their medical benefits for organized employees.  They should consider how these documents may be interpreted and whether they may be in need of revision.  Of course, this is a complex area of overlapping labor relations and employee benefits law, and an employer may not lawfully be able to make the changes it desires, for various reasons.  Nevertheless, it is better to understand the potential obstacles and to make a considered decision about dealing with them well before a work stoppage looms on the horizon, rather than scrambling to deal with the issue during a strike or (worse) finding out five years after cutting off benefits during a strike that the decision to do so was unlawful, as the employer did in Hawaiian Telcom.

By: Jaclyn W. Hamlin, Esq.

Seyfarth Synopsis: A review and analysis of select NLRB cases decided by President Trump’s new appointee as Secretary of Labor and former NLRB Member Alexander Acosta.

With the withdrawal of Andrew Puzder from consideration for the Secretary of Labor vacancy on President Donald Trump’s cabinet, former NLRB Member Alexander Acosta has emerged as the candidate for the role. If confirmed, Mr. Acosta will become the first Hispanic member of the Trump Cabinet.  While his confirmation has not yet been accomplished, and it is impossible to predict precisely the direction the Department of Labor will take if and when Mr. Acosta assumes the mantle of leadership, reviewing some of his words from his time as an NLRB Member is an interesting exercise, and may provide a few clues about his priorities and possible goals.  One thing that stands out in the opinions is his desire to follow precedent and established law, even where it results in an outcome that he may not support philosophically.

Mr. Acosta was appointed to the NLRB by President George W. Bush, and served his tenure in 2002 and 2003, as a member of the Majority. Nonetheless, Mr. Acosta occasionally availed himself of concurring or dissenting opinions to highlight his views on particular issues.  Below, we review just a few.

Alexandria Clinic, P.A., 339 NLRB No. 162 (2003) – In a concurring opinion, Mr. Acosta agreed with his majority colleagues that the employer did not violate the NLRA when it discharged several employees for participating in a strike without giving the requisite notice under Section 8(g) of the Act.  Mr. Acosta explained his view that the statutory language was clear and that “because the statutory language is unambiguous, we cannot depart from it.”  Mr. Acosta further warned against the dangers of ignoring the plain language of the statute – from increased litigation to uncertainty for employers.

Double D Construction Group, Inc., 339 NLRB No. 48 (2003) – Concurring with his majority colleagues, Mr. Acosta expressed a strong view on the rights of undocumented immigrant workers.  Mr. Acosta explained that the Administrative Law Judge discredited an employee’s testimony because he had used a false Social Security number to apply for work, and concluded from that act that the employee might offer false testimony.  Mr. Acosta firmly rejected this view, explaining that undocumented workers are statutory employees entitled to the protections of the NLRA.  He stated that a blanket policy of discrediting any “once-undocumented worker, who to obtain work provides a false social security number,” was inconsistent with the Act and that “such an automatic sanction makes it exceedingly difficulty for the General Counsel to establish an unlawful discharge or other unfair labor practice directed against an undocumented worker.”  While Mr. Acosta acknowledged that providing a false social security number is relevant to a credibility determination, he warned that the NLRB’s “continued commitment to prosecuting unfair labor practices directed against undocumented workers requires an understanding of the workplace and life realities faced by these individuals.”

Comcast Cablevision-Taylor, 338 NLRB No. 166 (2003) – Concurring in a decision related to a representation case, Mr. Acosta used his platform to highlight “potential inconsistencies in Board case law.”  Mr. Acosta expressed concern that the Sixth Circuit had used a Board holding in a previous case to rule on enforcement issues, but that the Board had not considered whether the case itself, or some other related inconsistent precedent, remained good law.  Mr. Acosta encouraged the Board to reconcile its precedent so as to avoid inconsistent results.

While Mr. Acosta’s confirmation is not yet accomplished, Republicans and Democrats alike have characterized him as a longtime public servant with experience enforcing labor laws. This small sampling of his concurrences indicates that he values logical decision-making based on the plain language of the law, where appropriate, and that he considers the consistency of precedent to be of importance.  His concurring opinion in Double D Construction reveals that he considers the government as having a role in protecting the rights of undocumented workers.  If confirmed as Secretary of Labor, Mr. Acosta will – of course – not be responsible for enforcing the NLRA.  His concurrences as a Member of the NLRB, however, provide interesting insights into the Department of Labor he may soon run.

Striking  By: Marshall B. Babson, Esq., Katherine Mendez, Esq., and Bryan Bienias, Esq.

Seyfarth Synopsis: Several organizations are planning nationwide strikes and boycott activities on February 16-17 to oppose Trump Administration and Republican policies. Employers impacted by these activities should be mindful of employees’ rights before responding.

Several labor and activist groups are calling for national general strikes and boycotts this week to protest policies enacted and proposed by the new Trump Administration and the Republican Congress.

Thursday, February 16: A Day Without Immigrants. The first action, “A Day Without Immigrants,” is currently scheduled for this Thursday, February 16.  The campaign, promoted in Spanish and English, has been spread through Facebook, fliers, and word of mouth and calls on immigrants and their supporters “not to go to work, open businesses, shop, eat in restaurants, buy gas, go to classes, or send children to school.” While the campaign originally focused on the Washington D.C. area, the campaign is expected to spread nationwide. A similar action in Milwaukee, Wisconsin this past Monday, February 13 drew thousands of protesters.

Friday, February 17: National General Strike. Then, on Friday, February 17, a group called Strike4Democracy has called for a national general strike and plans on “over 100 strike actions across the United States, and beyond.” The campaign calls for participants to forgo work on Friday and, instead “plan or take part in an event in your community” and “occupy public space with positive messages of resistance and solidarity.”

The organizers do not plan on stopping there. They intend to use Friday’s national general strike to “build towards a series of mass strikes,” with another mass strike planned on March 8, 2017, another on May 1, 2017 (May Day), and “a heightening resistance throughout the summer.”

So, what does this mean for employers?

While these general strikes and those planned for the future could wreak havoc on an employer’s operations — as employees fail to report to work or leave shifts early — the National Labor Relations Act provides protection for employees who engage in political advocacy that relates specifically to job concerns and to other workplace issues.

Employers have the right to enforce “neutrally applied work rules” to restrict employees from leaving work for political activities unrelated to workplace concerns. As discussed above, whether an employee’s actions are protected or unprotected turns on whether the employee’s absence relates to activity directed at “terms and conditions of employment” which the employer controls or to workplace concerns that affect all employees. If the absence is due to political activity totally unrelated to workplace concerns, employees could be subject to discipline, although discipline is not necessarily the prudent course to take.

Given the myriad issues to be addressed in these strikes, from immigration reform to minimum wage laws to worker’s rights, employers may be hard pressed to show that employees who participate in these strikes in lieu of working have engaged in unprotected activity. Employers could find themselves in further “hot water” with the NLRB if they discipline employees for absenteeism or tardiness related to the employees’ political activities.

If your company is affected by any of the strike activity this week or in the months ahead, contact the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations Team.

Interrogation By: Christopher W. Kelleher, Esq.

Seyfarth Synopsis: The NLRB held that American Medical Response of Southern California (“AMR”) did not violate an employee’s rights during a police investigation of an EMT’s gun violence threat by not providing the EMT with a union representative.

In November 2015, an EMT working in San Bernardino County, CA learned that the Operations Manager planned to fire the EMT’s girlfriend. The EMT responded by telling his coworker, “if things go the way they are looking, I’ll come shoot everyone here.” Concerned, the coworker reported the EMT to management.   

In response, the Operations Manager drove to the nearby police department and asked an officer for guidance on how to handle the situation. The officer came to AMR’s facility, spoke with the EMT while the Operations Manager was present, and performed a threat assessment. Although the Operations Manager was present during the officer’s interview with the EMT, the Operations Manager did not ask any questions during the interview. The Company later decided to terminate the EMT’s employment.

The EMT filed an unfair labor practice charge alleging that AMR had refused his requests for union representation during the interview. Under NLRB v. J. Weingarten, Inc., 420 U.S. 251, 256 (1975), an employee represented by a union has the right to request that a union representative be present during an investigatory interview which the employee reasonably believes could result in disciplinary action. In order to invoke this right, the employee must make a request for union representation. It is not the employer’s responsibility to inform the employee of his Weingarten rights.

Contrary to the EMT’s assertions, the administrative law judge (“ALJ”) found that the EMT did not request union representation, and thus, was not entitled to union representation. The ALJ’s findings were based in part on not crediting the EMT’s testimony. In making this finding, the ALJ noted some inconsistencies in his story. The ALJ also noted that on several occasions in the past, the EMT had requested and had been given union representation. Furthermore, the ALJ found that because the EMT demonstrated a thorough knowledge of his Weingarten rights, it did not make sense that he waited to complain about not receiving union representation until three months after the interview — when he filed his charge.

Notably, the ALJ also found that the EMT was not entitled to union representation because the interview was not an “investigative interview” for which the Weingarten rights applied. Rather, the interview was a police interrogation. Therefore, the EMT’s Weingarten rights did not apply.  Thus, not every meeting with employees constitutes an investigative interview under Weingarten, and even if an investigative interview does take place, the employee must actually request union representation to invoke his Weingarten rights.

View of United States Supreme Court Building, Washington, DC.

By: Robert J. Carty, Jr., Esq.

As our regular readers already know, the Supreme Court is poised to decide one of the most contentious issues facing the wage-and-hour world—namely, whether class- and collective-action waivers render workplace arbitration agreements unenforceable.

Well, it seemed poised until today.  Now we need to sit tight until at least October.

First, a quick recap.  A few weeks ago, the Supreme Court consolidated and granted certiorari in three appeals, one each from the Fifth, Seventh, and Ninth Circuits.  As consolidated, these cases ask the Court to decide whether Section 7 of the National Labor Relations Act (which protects certain “concerted activities”) prohibits class- and collective-action waivers in workplace arbitration agreements—even though the Federal Arbitration Act strongly favors such provisions.

Given the timing of the Court’s actions, many had speculated that oral argument would occur this April, likely leading to a decision by the end of June.  Today, however, the Court notified the parties that oral argument will be scheduled in the 2017 term, which begins this October.  In other words, we don’t expect this issue to be decided until sometime after argument—and the earliest argument will occur is October.

We can’t be sure why the Court has decided to set oral argument in the next term, but we can make an educated guess that the new Administration and the pending nomination of Judge Neil Gorsuch played a role.  Regardless, we have our eye on the situation and will keep you updated as things develop.  Stay tuned.

Striking  By: Bryan R. Bienias, Esq.

Seyfarth Synopsis: Court of Appeals for the First Circuit reversed the NLRB, holding that the Board lacked substantial evidence to find that the hospital group unfairly preferred nonunion workers when filling nonunion positions.

The National Labor Relations Board may not invalidate employment policies that accomplish legitimate goals in a nondiscriminatory manner “merely because the Board might see other ways to do it.” Such was the message the U.S. Court of Appeals for the First Circuit delivered to the Board in Southcoast Hospitals Group v. NLRB, No. 15-2146 (1st Cir. 2017).

The Court ruled that the Board lacked substantial evidence in finding that the hospital group discriminated against union members by giving nonunion workers a hiring preference for nonunion positions. The union’s contract granted union employees a similar preference when applying for union positions. According to Southcoast, the policy was intended to “level the playing field” and stave off staffing complaints by its nonunion workforce.

The Board argued that the policy tilted the playing field too far in favor of nonunion employees, claiming the number of nonunion positions “pales in comparison” to the number of positions covered by the union hiring policy and that nonunion hiring preference covered two facilities, as opposed to the single facility covered by the union policy.

This was not enough, the Court ruled. While the Court acknowledged that the nonunion policy covered more positions than the union hiring policy, union workers were not disproportionately harmed, given that the ratio of covered positions to covered employees was substantially the same under both policies. Likewise, nonunion employees had to compete with workers from two hospitals, as opposed to union workers’ need to compete only with workers from one hospital.

The Court also noted that the Board ignored other aspects of the hiring policies that still leave union members at a comparative advantage, namely that union seniority trumps qualifications for open union positions, while Southcoast is required to choose “the best qualified” candidate for a nonunion position, regardless of seniority.

Employer Takeaway

Employers must often walk a fine line in order to apply different policies to union and nonunion employees in a non-discriminatory manner. However, as the Court in Southcoast makes clear, this does not handcuff employers from attempting to “level the playing field” by giving certain advantages to nonunion employees, so long as the policy does not disproportionately harm union employees and is supported by a legitimate and substantial business justification.

NLRB By: Ashley K. Laken, Esq.

Seyfarth Synopsis: NLRB rules that the operators of the Detroit Masonic Temple unlawfully refused to bargain with a union that represented various engineers and maintenance workers at the temple, even though none of the remaining members of the bargaining unit were union members.

NLRB Chairman Pearce and Members Miscimarra and McFerran unanimously ruled that the Masonic Temple Association of Detroit and 450 Temple, Inc. violated the National Labor Relations Act by refusing to bargain with Local 324 of the International Union of Operating Engineers for a successor collective bargaining agreement. Masonic Temple Association of Detroit, 364 NLRB No. 150 (Nov. 29, 2016).

Facts

The Union had represented employees at the temple since approximately 1968. The most recent collective bargaining agreement covering the temple expired in early 2010, and the Association began operating the temple shortly thereafter.  At the time, there were approximately ten members in the bargaining unit, two of whom were dues-paying Union members.  In mid-December 2010, the Union sent the Association a written request to bargain over a new CBA.  The Association did not respond, and in January 2011, the Union filed an unfair labor practice charge against the Association for refusing to bargain in good faith.  The parties entered into a settlement agreement, with the Association agreeing to recognize the Union and bargain in good faith as a successor employer, and they met approximately once per month between January 2011 and May 2011.

After the last negotiation session in May 2011, the Union was told that a new unnamed entity would take over management of the temple and that the Union should wait until the changeover to negotiate a CBA with that entity. In the fall of 2011, the Detroit Masonic Temple Theater Company took over management of the Temple, and the Union held one negotiation session with that entity in January 2012.  The Association and the Theater Company ended their relationship in November 2012, and shortly thereafter, 450 Temple Inc. took over management of the temple.

From late 2012 until January 2015, the Union made multiple attempts to restart negotiation discussions, but in January 2015, the President of the Association and 450 allegedly told the Union that because Michigan had become a right-to-work state and there were no longer any Union members working for the temple, he did not feel it necessary to and would not bargain with the Union. In response, the Union filed the unfair labor practice charge at issue in this case.

Board’s Decision

An administrative law judge found that the Association and 450 were a single employer, in part because the Association had 100% ownership of 450 and they operated out of the same office, and no exceptions were filed in response to that ruling. Thus, the Board’s decision did not address this issue.

Regarding the merits of the charge, the Association and 450 argued that they did not violate the Act because the Union was not the exclusive representative of a majority of employees in the bargaining unit, pointing to the fact that none of the employees in the bargaining unit were Union members. The Administrative Law Judge (and the Board) disagreed, observing that an employer may rebut the continuing presumption of an incumbent union’s majority status and unilaterally withdraw recognition only on a showing that the union has in fact lost the support of a majority of the employees in the bargaining unit, and that bargaining unit employees’ union membership status is not determinative of the employer’s obligation to bargain.  In other words, evidence of a desire to withdraw from membership in the union is insufficient proof that the union has in fact lost the support of a majority of the unit.

The Board found that there was no evidence of any action taken by the bargaining unit employees to express their lack of support for the Union, such as a petition to decertify the Union or statements by the employees that they no longer wanted to be represented by the Union. The Board ordered the Association and 450 to bargain with the Union on request and to post a notice to employees.

Employer Takeaway

The decision highlights the fact that there is a distinction between an employee’s desire to be a member of a union and his or her desire to be represented by a union.  Even if the majority of employees in a bargaining unit are not union members, that does not necessarily mean the union has lost its majority support.  Employers that have questions about the status of an incumbent union’s support should connect with their labor attorney to ensure they do not engage in conduct that would run afoul of the Act.

By: Ronald J. Kramer, Esq.

Seyfarth Synopsis:  In Weavexx, LLC the Board deferred to an arbitrator’s finding that the employer had the right to change its payday and pay cycle without first bargaining.  The bigger question is how much longer will such charges be deferred pending arbitration, and the extent to which the Board will defer to an arbitrator’s award.

The Board in a 2-1 decision reversed an ALJ and deferred to an arbitrator’s finding that an employer did not violate its collective bargaining agreement by unilaterally changing its employees’ payday and pay cycle.  Weavexx, LLC, 364 NLRB No. 141 (Nov. 2, 2016) (here).  In Weavexx the employer argued that its management rights clause gave it the ability to make the unilateral changes, and the arbitrator ultimately found that the “Company’s use of managerial discretion was proper and should not be seen as a violation of a binding past practice.”

So how did this “bread and butter” contract case get to the Board?  The arbitrator apparently did a very poor job of making it clear that he applied the contract to find the employer had the right to make the change.  The arbitrator framed the arbitration issue as whether the employer’s change violated a binding past practice.  While the arbitrator set forth the employer’s contract argument, and listed the management rights provision as one of the contract sections at issue, apparently in his analysis the arbitrator really only expressly addressed an employer’s “noncontractual inherent management prerogatives” and past practice instead of addressing how the management rights clause authorized the employer’s actions.

This, along with some confusion as to whether the arbitrator addressed both the pay cycle and payday change, was enough for the Regional Director and the ALJ to determine that deferral was not warranted under Speilberg Mfg. and Olin Corp. because the evidence failed to reflect that facts relevant to resolving the ULP were presented, considered or decided by the arbitrator.  Dissenting Chairman Pearce agreed, and focused more on arbitrator’s failure “to make any finding whatsoever” on the key issue of whether the management rights clause or other contract language authorized the employer’s unilateral actions.  The Board majority worked around the arbitrator’s failing by finding that there was enough evidence within the decision to determine that he did rely upon the management rights clause, and that the arbitrator adequately considered the ULP given that the contractual issue and evidence were factually parallel to the ULP.

There are three takeaways from this decision.  First, in any arbitration involving a deferred charge it is important to argue, address and get the arbitrator to rule on the issues and contract language, such as the management rights clause, at issue in the ULP.  Common law reserved management rights claims will not cut it.  Second, while in this case there was no agreed issue and the arbitrator just worked from the union’s position, how the issue is crafted is important.  Third, note the Regional Director, an ALJ and the Board Chairman opposed deferring to the award.  The Board and its Regions are scrutinizing deferral over contract disputes much more closely than in the past.  Not only will this make deferral more difficult, at some point the Board may opt to revise its deferral standards similar to what it did for deferring Section 8(a)(3) matters in Babcock & Wilcox Construction Co., 361 NLRB No. 132 (2014).  Deferral may be an endangered species.

 

By: Paul Galligan, Esq. & Samuel Sverdlov, Esq.

Seyfarth Synopsis: By filing a complaint against Postmates, Inc. challenging their arbitration waiver, the NLRB assumed that couriers for Postmates are employees, rather than independent contractors.

Earlier this month, the National Labor Relations Board (“NLRB”) filed a complaint and notice of hearing against Postmates, Inc. (“Postmates”) (12-CA-163079), an on-demand company, similar to Uber, that has a network of couriers delivering goods.  The complaint alleges that Postmates violated the National Labor Relations Act (“NLRA”) by requiring employee drivers to enter into arbitration agreements as a term of employment.  The complaint further alleges that Postmates interfered with the Section 7 rights of Customer Services Associates (“CSA”) by prohibiting them from discussing terms and conditions of employment.

Although the substance of the NLRB’s allegations – the challenged arbitration agreement – is interesting in and of itself (to read more on our extensive coverage of this issue, please see our articles here, here, here, here, and here), the critical importance of the NLRB’s complaint is far more subtle.

While the NLRB has made clear that misclassification of independent contractors could result in an unfair labor practice (“ULP”) (to read more on this issue, please see our articles here and here), in this case the NLRB simply assumed that Postmates’s couriers are employees, rather than independent contractors, without holding a hearing or allowing any briefing on the issue.  This is significant because the NLRB does not have jurisdiction to file complaints on behalf of independent contractors.

Outlook

The Postmates complaint should put employers in the on-demand economy (and generally, employers utilizing independent contractors) on notice that the NLRB will likely gloss over the employer’s characterization of independent contractor status, and file a ULP when it believes that workers are “employees” under the NLRA, and that a violation of the NLRA has occurred.

Accordingly, employers in the on-demand economy should: (1) make sure that their classification of couriers as independent contractors is consistent with the law; and (2) avoid having overly-broad or vaguely defined employment policies that could be interpreted to infringe on the Section 7 rights of potential employees. This “belt and suspenders” approach could help on-demand companies avoid lengthy and costly battles at the NLRB.