the nlrb continues to flip-flop on joint employment
By: Ronald Tobia, Catherine Wells & Chelsea Jasnoff, chiesa, shahinian & giantomasi PC's
I
The purpose underlying the joint employer doctrine is to ensure that employees have the right and opportunity to bargain with entities who share control over essential terms and conditions of their employment, although not the “primary employer” of those employees. The lynchpin of the joint-employer analysis is whether the entities “share or codetermine” matters that involve the essential terms and conditions of employment for a single workforce. See Browning-Ferris Industries of California Inc., and Sanitary Truck Drivers and Helpers Local 350, International Brother Hood of Teamsters, 362 NLRB No.185, at pp.8-9 (2015). How that concept is applied, however, has been in flux for the past several years due to the varying composition and views of the members of the National Labor Relations Board (“NLRB” or “Board”). The composition of the Board varies mostly according to political alliances. Indeed, on February 26, 2018, the Board, which has flip-flopped on the appropriate standard, revisited the issue of what constitutes joint employment under the NLRA, and turned on its head a decision made less than two months earlier. The Board was compelled to revisit its ruling in Hy-Brand Industrial Contractors, Ltd., et al and Upshaw, et al., Cases 25-CA-163189 (December 14, 2017), after a report was issued by the Inspector General criticizing the Board’s decision on the grounds that one Board member’s participation in that decision was improper due to a potential conflict of interest. Ultimately, a unanimous Board vacated the December 2017 decision in Hy-Brand, reinstating, at least for the time being, the 2015 test established by Browning-Ferris Industries of California Inc., and Sanitary Truck Drivers and Helpers Local 350, International Brother Hood of Teamsters, 362 NLRB No.185 (2015).
Hy-Brand, which was decided in December 2017 by a Republican majority of the Board, overturned the more liberal, pro-employee joint employer test the Board had adopted in Browning– Ferris just over two years earlier. Not surprisingly, the NLRB’s Hy-Brand ruling was promulgated at the close of the term of Board Chairman Philip Miscimarra, a Republican who was one of two dissenters in the Obama-era Browning-Ferris case. In HyBrand, the Board rejected the Browning-Ferris standard, which, according to the Board, improperly expanded the definition of “employer” to include an entity that exercised indirect control or control that was limited or routine, or an entity that merely reserved the right to control over employees, but never in fact exercised that right. According to the Board, the Browning-Ferris standard “removed all limitations on what kind or degree of control over essential terms and conditions of employment may be sufficient to warrant a joint-employer finding.” Hy-Brand, Cases 25-CA-163189 at p.7. After extensive criticism of the Browning-Ferris standard on various legal and policy grounds, the Board replaced the Browning-Ferris standard with a more pro-employer test. The pro-employer test pronounced in Hy-Brand required evidence that the putative joint employers have actually exercised joint control over essential employment terms such as recruitment, hiring, wages, discipline and the other terms and conditions of employment (as opposed to merely having reserved the right to exercise control), and that the control exercised is “direct and “immediate” (as opposed to “limited and routine.”). Hy-Brand, Cases 25CA-163189 at p.5. The Board believed this test to be superior to the “open-ended” Browning-Ferris standard, because, among other reasons, it established “a clearly discernible and rational line between what does and does not constitute a joint employer relationship . . .,” thereby fostering more certainty with respect to labor relations. Hy-Brand, Cases 25-CA-163189 at pp.17-18.
Labor Relations
magine your business, a non-union shop, contracts with a unionized staffing service that provides employees to work in your business facility or to drive your company’s trucks. Imagine also that your business, pursuant to an agreement with the service provider, retains the right to set schedules, wages and recommend discipline or termination of employment for the suppliers’ workforce, although such rights are never exercised. Under this and other scenarios, your business could be exposed to obligations imposed by the National Labor Relations Act (“NLRA”). Retaining the right to control the terms and conditions of employment for another entity’s employees (even if that control is not exercised) could constitute a joint employer relationship with that entity, thereby creating a duty to collectively bargain as well as other obligations.
As a consequence of the Board’s decision to vacate Hy-Brand, for the time being, the NLRB will potentially analyze putative joint employer relationships under the more employee-friendly Browning-Ferris standard. Under that standard, which represents a dramatic departure from decades of prior Board precedent, joint employer status will be imposed on an entity that merely reserves the right to control, even if it has never exercised that control. Additionally, joint employer liability will be imposed on an entity that exercises only “limited or routine” control over employees, or exerts such control over employees only
Utility & Transportation Contractor | april| 2018 39