The NLRB Reverses Its Position on Joint-Employment Status

Document created by 1002043 on Aug 28, 2015Last modified by 1002028 on Sep 3, 2015
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george pic for news.jpgThe National Labor Relations Board (NLRB) in a recent 3-2 decision involving Browning-Ferris Industries of California re-defined its standard for determining joint-employer status.  The Board held that its previous joint employer standard had failed to keep pace with changes in the workplace and economic circumstances in light of the large numbers of the nation’s employees employed through temporary agencies (Board Chairman Mark Gaston Pearce was joined by Members Kent Y. Hirozawa and Lauren McFerran in the majority opinion; Members Philip A. Miscimarra and Harry I. Johnson III dissented).  This decision follows a similar case late last year where the NLRB General Counsel ruled that McDonald’s, as a franchisor, can be held liable for employment decisions made by its approximately 13,000 US franchised outlets.


The NLRB has repeatedly changed its standard on whether temporary or leased employees may vote in the same bargaining unit as a company’s “regular” employees. During the Clinton Presidency, temporary/leased employees could vote with regular employees if they were “jointly employed” by the leasing/temporary agency and the Company, but during the Bush Presidency temporary/leased employees could not be placed into the same bargaining unit with regular company employees unless all parties agreed to this inclusion—the union, the Company and the temporary/leasing agency.


The Board reasoned in this case that two or more entities are joint employers of a single workforce if they are both employers within the meaning of the common law;  and if they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will, among other factors consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.


So the Board found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform job duties for BFI such as cleaning and sorting of recycled products. The Board based its decision on the fact that BFI had indirect and direct control that over essential terms and conditions of employment of the employees supplied by Leadpoint as well as BFI’s reserved authority to control such terms and conditions.


Board members Miscimarra and Johnson in their dissent stated that this decision will “subject countless entities to unprecedented new joint-bargaining obligations that most do not even know they have, to potential liability for unfair labor practices and breaches of collective bargaining agreements, and to economic protest activity, including what have heretofore been unlawful secondary strikes, boycotts and picketing.”  They added that “the majority abandons a longstanding test that provided certainty and predictability, and replaces it with an ambiguous standard that will impose unprecedented bargaining obligations on multiple entities in a wide variety of business relationships, even if this is based solely on a never-exercised “right” to exercise “indirect” control over what a Board majority may later characterize as “essential” terms. This new test leaves employees, unions, and employers in a position where there can be no certainty or predictability regarding the identity of the “employer.”


If you have questions regarding this and other joint employment issues call CAI’s Advice and Resolution Team at 919-878-9222 or 336-668-7746.

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