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.