• NLRB Adopts New Joint Employer Test: Companies That Kind of, Sort of, Maybe Someday Could Exercise Control Over Employees Can Be Joint Employers
  • September 1, 2015
  • Law Firm: Mintz Levin Cohn Ferris Glovsky Popeo P.C. - Boston Office
  • The NLRB dropped a major bomb on businesses in subcontracting, franchising, and temporary staffing relationships yesterday, adopting a new-very, very broad-definition of joint employment. In Browning-Ferris Industries of California, Inc., a 3-2 decision, the NLRB decided that workers at a Browning-Ferris recycling facility were not only employees of subcontractor Leadpoint, but also were employees of Browning-Ferris-this even though Browning-Ferris never actually exercised its authority to control the terms and conditions of the workers’ employment.

    The NLRB’s Browning-Ferris decision reverses a regional director’s determination that no joint employment existed with respect to the recycling plant workers, and, more importantly, completely changes the definition of “employer” under U.S. labor law. Since 1984, the NLRB has considered a company a joint employer only if it exercised direct control over working conditions. Now, a company may be deemed a joint employer if it simply exercises indirect control or even just reserves the right to do so.

    This “kind of, sort of, maybe someday” standard, if not reversed on appeal to the Ninth Circuit Court of Appeals or D.C. Circuit Court, will have a major impact on business as usual. The NLRB issued a statement noting that 2.87 million U.S. workers are employed through temp agencies. This says nothing of the impact it could have on franchising and subcontracting relationships. All kinds of non-union contracting entities who exercise little or no authority over workers’ day-to-day activities could be on the hook for collective bargaining, responding to unfair labor practice charges, and dealing with the impacts of secondary employee strikes.

    Unquestionably, if this decision stands, the staffing industry will take a hit as companies may now choose to bring employees in-house to avoid any “surprises.” It may not be all sunshine and roses for the unions, however, which likely will be forced to spend inordinate amounts of time trying to get every entity (the employer’s employer, the employer’s employer’s employer, and on and on) that might possibly have some say in an employee’s work conditions to bargain with them. Note to unions: Secure a very large bargaining table and many chairs, and block off months, possibly years, to reach agreement among all those parties.

    Although Browning-Ferris is not this Board’s first push to expand its jurisdiction, it is certainly the most stunningly broad in its potential impact. The dissent from Philip Miscimarra and Harry Johnson states that the majority overstepped the powers granted them by Congress. The outcry from the business community is deafening. Given the opposition, we anticipate that there is at least one more chapter left to this story.