Last week on our Employer Labor Relations Blog we wrote about a recent ruling of the National Labor Relations Board in the Browning-Ferris Industries (BFI) case that vastly expanded the definition of joint employer.

The case involved two companies, BFI and Leadpoint. Under a contract with BFI, Leadpoint supplied employees to BFI to perform various work functions including cleaning and sorting of recycled products. Using a greatly expanded legal definition, the Board found the two companies to be “joint employers.” Under the Board’s newly expanded test, two or more otherwise unrelated employers may be found to be a “joint employer” of the same employees under the National Labor Relations Act “if they ‘share or codetermine those matters governing the essential terms and conditions of employment’.” The Board’s ruling will have a significant impact on many business relationships. It greatly expands the types and number of entities that can be held responsible for unfair labor practice violations and who may be held to have collective bargaining obligations regarding employees of a totally separate, independent employer.

The Board’s decision may also expand OSHA liability. Under OSHA’s multi-employer policy an employer can already be cited for hazards to other employers’ employees if OSHA finds that the employer controls the hazard or is responsible for creating the hazard or correcting the hazard. Accordingly, “controlling employers” already faced potential OSHA liability. However, the BFI decision may allow OSHA to further expand controlling liability under the OSH Act to employers who really have little or no actual “control” over workplace safety. For example, OSHA appears intent on using the BFI decision to expand OSHA liability to franchisors when franchisees have been found to have violated the Act. OSHA is already pushing this agenda in a number of ongoing inspections.

Any employer that utilizes franchise agreements should carefully consider the potential impact of the BFI decision on their potential OSHA liability.