Joint-Employer Standard Redefined
December 19, 2017
On Thursday December 14, 2017, the National Labor Relations Board overturned its 2015 decision in Browning-Ferris Industries, 362 NLRB, No. 186, by a 3-2 vote in Hy-Brand Industrial Contractors, 365 NLRB 156. You can read more about the holding in Browning-Ferris here.
The Board held that in the future, two or more employers will be deemed to be “joint employers” under the National Labor Relations Act only if proof exists that one employer has exercised control over the essential terms of employment of another employer’s employees and that it has done so directly and immediately in a manner that is not limited and routine. This reverses the holding in Browning-Ferris which merely required one employer to have the right to exercise control over the essential terms of employment of another employer’s employees, whether it did so or not, and if it did, required that control merely be indirect.
This holding returns the determination of joint-employer status in the private sector labor-management context to pre-Browning-Ferris days. This means that even if a union can make a showing of proof that (1) an employer has indirect control over another employer’s employees, (2) retains, but has not exercised, contractual control over another employer’s employees, or (3) exercises limited or routine control over another employer’s employees, this still is insufficient to establish joint-employer liability.
Why this decision is important for you: This decision significantly rolls back the ability of private sector unions to bargain with certain employers, despite their potential control over their members. While under Browning-Ferris, employers with even the potential to affect the essential rights of another employer’s employees could be required to bargain with those employees’ bargaining representative, many of these same employers no longer will be subject to such requirements. The Board’s ruling restores a much stricter standard in determining who is and is not a joint-employer, thereby returning greater control to employers.