Browning-Ferris Decision by NLRB Changes Joint-Employer Standard
On August 27, 2015 the National Labor Relations Board (NLRB) released its 3-2 decision in Browning-Ferris Industries of California, Inc. The decision re-defined the NLRB’s standard for joint-employer status. Joint-employer status now can encompass situations where a company hires a contractor to staff its facilities. The company may be considered a “joint employer” of the workers staffed at its facility, even if the company does not exercise any supervision or control over the contractor’s staff.
Now, the NLRB may find that two or more entities are joint employers of a single work force if: (1) both entities are employers (as defined by the common-law); and (2) both entities share or codetermine those matters governing the essential terms and conditions of employment. The important point to note is that the employer is considered a “joint employer” if it has the right to control, whether direct or indirect, and regardless if the control is ever exercised. Also, the “essential terms and conditions” are expansive and broad. They include:
Putting aside the legal jargon, this means that employers using staffing agencies may now be classified as a joint employer of those staffing-agency employees. This could subject employers to liability for unfair labor practices, joint bargaining obligations (if the staffing agency’s employees are unionized), and possibly subjecting employers to picketing or strikes, which would have been considered unlawful secondary activity before the Browning-Ferris decision.
The NLRB did specify that each case would be handled on a case-by-case factual analysis. One thing is for certain though, the new standard is one that will increase the likelihood of an employer being classified as a joint employer. In light of this increased possibility, employers should consider reviewing their contracts with contractors providing employees and talk with their attorneys about potential areas of shared control or of the right to control those workers.