We previously reported that the National Labor Relations Board (NLRB) reversed its long standing, plaintiff-friendly, rule governing the apportionment of fault between co-employers under the joint-employer theory of liability. However, following an Inspector General report which found that NLRB board member William Emanuel violated ethical standards in participating in the December 2017 decision to overturn said rule, on February 26, 2018, the NLRB, once again, reversed itself by unanimously vacating its December 2017 decision and reinstating its holding in the Browning-Ferris Industries matter, thereby returning to the test which makes easier to prove the existence of a joint employer relationship.
Joint employment exists when two or more entities exercise some degree of control over the work or working conditions of an employee. The most common examples of this relationship are staffing agencies or franchises. Should a joint employer relationship exist, the employers are held responsible, both individually and jointly, to the employee for compliance with employment related statutes such as FMLA requirements and wage and hour laws.
Prior to the Browning-Ferris decision in September 2015, the test for joint employment required that two or more employers exert direct and significant control over the same employee such that they share matters governing the essential terms and conditions of employment (i.e. hiring, terminating, and discipline). The degree of employer control had to be actual and substantial, which in turn required a strong showing to satisfy the test.
The once again controlling Browning-Ferris decision makes it substantially easier to establish a joint employer relationship by propounding a new test which requires only that the entities in question be “employers” within the meaning of the common law, and share or codetermine matters regarding the employee’s terms and conditions of employment. Essentially, the test no longer mandates that employer control be direct or immediate; a showing of indirect or subsidiary control over working conditions is generally sufficient. The test also expands those matters found to be “essential terms and conditions” of employment beyond simply hiring and firing employees, to employee scheduling, assigning work, determining method of performance, and dictating seniority and overtime.
The return to a pre-Browning-Ferris state was a welcome development for employers. Unfortunately, the burden has once again been substantially lowered for establishing a joint employer relationship. Following Monday’s decision, the former Browning-Ferris holding will once again prevail as the law of the land for determining joint employer status, making it considerably easier to demonstrate a joint employer relationship. Consequently, co-employers, like staffing agencies, should closely scrutinize their relationships to ensure that their policies and practices are in line with current authority.