Last week, Browning-Ferris Industries, the California-based waste management company, appealed two decisions issued by the National Labor Relations Board related to the definition of joint employer.  Its appeal to the U.S. Court of Appeals for the D.C. Circuit represents just the latest chapter in an ongoing saga that began with a momentous ruling by the NLRB this past August.  The outcome of this appeal could have serious implications for affected companies, workers and other stakeholders.

The NLRB Redefines the Joint Employer Standard in Browning-Ferris

As discussed by my colleague Erin Horton here, the NLRB overturned a long-standing definition of joint employers in a 3-2 decision in Browning-Ferris.  The NLRB loosened this definition considerably, holding that the board will consider even those companies who exercise indirect control of employment conditions (or even a reservation of rights to do so) as joint employers.  Under the NLRB’s previous joint employer standard, only subject employers who exercised direct and immediate control over employment conditions were considered joint employers.

The majority considered the new “indirect control” standard a more realistic approach to the evolving 21st century employment landscape.  Critics of this decision, including the dissenters, suggested that the majority stepped beyond the powers granted to the NLRB by Congress.  In addition, some have argued that if the joint employer definition outlined in this decision endures, it might upend the business model for staffing agencies, franchisors and even sub-contractors subject to the NLRA.

The NLRB Applies the New Standard in Green Jobworks

Given the change ushered in by Browning-Ferris, commentators and critics also closely examined the NLRB’s subsequent October 2015 Green Jobworks decision.  There, the NLRB examined four specific employment conditions—(1) business organization, hiring, transferring, discipline and firing; (2) wages; (3) daily supervision; and (4) the appropriateness of participation in collective bargaining—and after an extensive factual analysis it found the absence of a joint employment relationship.  (For an excellent and in-depth analysis of this decision by my colleagues Michael Arnold and Natalie Young, please click here).  Though Green Jobworks provided some insight into the NLRB’s analytical framework, interested parties remained concerned about the particular contours of joint employment for NLRA-subject entities.

Browning-Ferris Appeals

This month, Browning-Ferris opted against recognizing and negotiating with the union.  Based on this refusal, the union filed an unfair labor practice charge, which led to another adverse decision against Browning-Ferris by the NLRB.  On January 20, 2016, after that decision, Browning-Ferris petitioned the D.C. Circuit court of Appeals to review both Browning-Ferris decisions.

Takeaways

  • As of posting, it is not clear if the D.C. Circuit Court of Appeals will take up Browning-Ferris’ petition for appeal.
  • If not reversed on appeal (whether by the D.C. Circuit Court, or perhaps, later by the Supreme Court), the NLRB’s new joint employer standard could impact staffing agencies, franchisors and subcontractors and others operating in the so-called fissured industries. (For a more in-depth analysis of some of these implications, click here)
  • And while the standard announced in the NLRB’s dual Browning-Ferris decisions apply only to entities subject to the NLRA, if the joint employer litmus endures, the collective bargaining process could become quite complex, with new players at the bargaining table and novel issues under contention.
  • Given the potential impact of the NLRB’s new standard for joint employment for subject companies and workers, including the possibility that the D.C. Circuit could endorse or strike this standard down, we will continue to closely monitor and analyze this issue.