News & Events

Client Update: Joint Employer Rule in Flux

5.9.18

 

Under the Obama administration, the National Labor Relations Board (“NLRB”) set forth a broader joint employer test in the Browning-Ferris Industriescase[1]. The Browning-Ferris Industries case relaxes the test the NLRB uses to determine whether a company qualifies as a joint employer. 

Prior to the Browning-Ferris ruling, the general rule was a business having “direct and immediate” control over terms and conditions of workers’ employment were deemed to be joint employers.[2]In Browning-Ferris, the NLRB held that a business could be deemed a joint employer if it exercised “indirect control” or possessed the ability to exercise such indirect control over the employee’s terms and conditions of employment. [3]This ruling made it possible for contractors or franchisees to be deemed joint employers even if the non-employer entity did not exercise explicit control over workers terms and conditions.

While the Browning-Ferris decision was pending on appeal before the D.C. Circuit Court, on December 14, 2107 the Republican NLRB overturned the Browning-Ferris decision in Hy-Brand Industrial Contractors Ltd.[4]In 2017, the NLRB decided the Hy-Brandcase. The NLRB overruled the Browning-Ferris “indirect control” standard in favor of the pre-Browning-Ferris standard of “direct and immediate” control.[5]   

On February 26, 2018, the Hy-Brand case was set aside when it was determined that a board member, William Emanuel—a  Trump appointee—improperly participated in the decision. Emanuel’s former firm represented the contractor in the Browning-Ferris matter, raising a clear, but overlooked conflict of interest. 

So now what?The NLRB has asked the D.C. Circuit Court to reinstate its appeal of the Browning-Ferris decision.[6]While that matter works its way through the Court, there are a few other cases that may come before the NLRB that may shed light on the joint employer issue. However, until a further ruling is issued ,the Browning – Ferris test is still the governing law. 

What do we do?Best practice would be to specifically outline the relationship between the parties in a written contract. Be sure to outline the specific roles of each business and to specifically disclaim any joint employer relationship. 


By: Suketa Shah

Suketa Shah is an attorney in the Firm’s Franchise Law and Construction Law Practice Groups. If you have any questions or concerns about this issue or any other matter, please contact Suketa directly at 813-223-1099.            



[1]Browning-Ferris Industries, 362 NLRB No. 186 (2015).

[2]https://www.nlrb.gov/news-outreach/news-story/nlrb-overrules-browning-ferris-industries-and-reinstates-prior-joint

[3]Browning-Ferris Industries, 362 NLRB No. 186 (2015).

[4]See FN 2.

[5]See FN 2.

[6]Browning-Ferris Industries of California Inc. v. National Labor Relations Board et al., case numbers 16-1028, 16-1063 and 16-1064, in the U.S. Court of Appeals for the District of Columbia Circuit.

Related Attorney
Suketa K. Shah

Related Practice
Franchise Law

Related Attorney

Suketa K. Shah

Related Practice

Franchise Law

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