Can a company be held liable for labor-law violations committed by its independent contractors? The answer is a definite maybe.
A recent court decision involving the CNN network advances a heated partisan dispute about who qualifies as a “joint employer” liable for unfair labor practices under the National Labor Relations Act.
Finding that the National Labor Relations Board didn’t explain why it applied a new and broader standard in 2014 when it decided that CNN was the joint employer of its broadcast technicians, a federal appeals court in Washington, D.C. heightens the stakes of the joint employer debate just as two new appointees to the NLRB appear poised to apply more restrictive qualifications. NLRB v. CNN America, Inc., 209 LRRM 3402 (D.C. Cir. 2017).
This is CNN. And Another Company.
Technicians at CNN’s Washington, D.C. and New York City bureaus were historically represented by the National Association of Broadcast Employees and Technicians, the court said. In 2001, CNN entered into service contracts with an entity called Team Video Services, which agreed to provide CNN with the technical services in exchange for labor expenses and a monthly management fee.
In September 2003, however, CNN announced that it was terminating its contract with TVS and bringing the services in-house. The union asked CNN for recognition and bargaining, including a discussion about future jobs for the unit employees it represented, but CNN declined.
CNN planned a multistep “behavioral interviewing process” to hire more than 200 skilled technicians for the two bureaus. Former employees of TVS could apply but had to interview. Ultimately, more than 100 unit employees lost their jobs.
Union Says the News is Broken
The union filed unfair-labor-practice charges against CNN, and the NLRB found that the network, as a joint employer with TVS, unlawfully terminated the TVS contracts based on anti-union animus and failed to bargain with the union about its decision to terminate the contracts. The board applied to the D.C. Circuit for enforcement of its order, and CNN asked for review.
Court Says NLRB’s Transmission is Garbled
The court held that the NLRB’s joint employer finding couldn’t stand. This wasn’t because CNN and TVS necessarily weren’t joint employers, but because the board didn’t explain well enough how it concluded they were.
The board had found that CNN was responsible because TVS and CNN “share or codetermine” terms and conditions of employment, but the board didn't say anything about 30 years of its own case law suggesting that the more appropriate question was whether CNN had “direct and immediate” control over employment matters.
Stay Tuned for More Decisions
Though important, the CNN case is distinguished by the board’s failure to provide a reasoned explanation for using a new standard.
The real judicial test that remains in the joint-employer debate is the D.C. Circuit’s pending review of the board’s decision in Browning-Ferris, 362 NLRB No. 186 (2015), which canvassed 30 years of joint-employer cases and explained just why a broader standard is more appropriate. The outcome of that case, along with the views of the new administration’s two recent board appointees, is likely to clarify the issue, at least for some time.
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