• NLRB - Joint Employer Status After Browning-Ferris
  • December 14, 2015
  • Law Firm: Shawe Rosenthal LLP - Baltimore Office
  • A Regional Director (RD) of the National Labor Relations Board applied the NLRB’s joint employer analysis set forth in Browning-Ferris and found that joint employer status did not exist between a temporary staffing agency and the host company.

    As we previously discussed in an E-lert, the NLRB restated its joint employer standard in Browning-Ferris Indus. of Calif., Inc., holding that separate entities will be considered joint employers if: (1) “there is a common-law employment relationship with the employees in question”; and (2) the “employer” in question “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.”

    In Green JobWorks LLC/ACECO, LLC, the RD reviewed many of the same relationship factors at issue in the Browning-Ferris case, but found differences that led him to find that the two companies - GJW and ACECO - were not joint employers.

    Hiring, Firing and Transferring: The RD found that ACECO did not retain the same right of control over the selection, placement, and termination of employees as Browning-Ferris. While ACECO could request that certain employees be hired or assigned (or not assigned) to its site, GJW apparently retained the final discretion whether to agree to ACECO’s requests, which was not the case in Browning-Ferris. Moreover, several of the requests were made at the direction of ACECO’s general contractor, not based on ACECO’s own initiative. In addition, unlike Browning-Ferris’ right to dismiss the staffing agency employee for “any reason,” ACECO could only refuse a GJW employee for safety violations or other reasonable objections. Although recognizing that any control is arguably a factor in favor of joint employer status, the RD nonetheless noted the limitation as significant.

    Wages: The RD found that, unlike in Browning-Ferris where the parties’ agreement specified that no staffing agency worker could receive wages higher than Browning-Ferris employees, there was no provision governing the wages to be paid to GJW workers. The RD rejected the argument that ACECO controls the wages of GJW employees in negotiating the price of the contract, thereby effectively reimbursing GJW for the wages paid to GJW workers. The RD also found significant the ability of GJW workers to negotiate a higher individual wage based on performance and other factors.

    Daily Supervision: Browning-Ferris managers exercised “near constant oversight” of the staffing agency workers - holding performance meetings, assigning specific tasks, and counseling staffing agency workers. In contrast, the only meetings held by ACECO were orientation training meetings, which were actually run by ACECO’s general contractor and not ACECO itself. In addition, ACECO exercised only minimal supervision, with GJW making most of the substantive decisions about the terms and conditions of employment. The RD found that ACECO’s general contractor, in fact, exercised more supervisory authority than ACECO, with regard to setting schedules and allowing any workers, whether from ACECO or GJW, to be on the jobsite.

    Lessons Learned: The RD’s decision has been appealed to the Board, and it will be interesting to see how the Board approaches the case. In the meantime, however, employers should note that the joint employer assessment is a very fact-specific one, in which both the companies’ agreement and actual activities will be significant.