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Is there anything new at the National Labor Relations Board on the joint employer issue?

October 2015

Yes.  On August 27, 2015, the NLRB issued a highly anticipated decision related to the application of its joint-employer standard (the “Standard”) in the Browning-Ferris case you have probably heard about. At issue in Browning-Ferris (“BFI”), was whether BFI - the putative employer - was a joint employer of Leadpoint employees under the National Labor Relations Act. BFI owns and operates a recycling facility that sorts materials into separate commodities and then sells them to other businesses at the end of the recycling process. BFI contracted with Leadpoint to provide workers to manually sort materials and perform other job functions at the recycling facility. BFI and Leadpoint’s relationship was governed by a temporary labor services agreement (the “Agreement”).

In reaching its decision to find BFI and Leadpoint to be joint-employers, the NLRB rejected certain requirements that have been imposed since 1981. For example, the NLRB previously distinguished between merely possessing the ability to control employees’ terms and conditions of employment and actually exercising control over employees’ terms and conditions of employment. The NLRB has, with this decision, abandoned that limitation, finding that merely having the authority to control may indicate joint employer status. Likewise, the NLRB will no longer require that control be exercised directly and immediately.

Now, the NLRB may find that two or more statutory employers are joint employers of the same employee if they “share or codetermine those matters governing the essential terms and conditions of employment.” In determining whether an employer meets that Standard, the relevant inquiry is whether there is 1) a common-law employment relationship; and 2) whether the putative employer possesses sufficient control over the employees’ essential terms and conditions of employment to permit meaningful collective bargaining.  There are several other facts that made the NLRB conclude that BFI and Leadpoint were joint employers that are important for all business owners to avoid.  While much more fact intensive, employers and franchisors seeking to avoid a joint-employer relationship should be especially careful not to reserve or exercise direct or indirect control over matters such as hiring, firing, discipline, supervision, wages, hours, number of workers, scheduling, seniority, assigning work, and determining the manner and method of work performance.

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