Democrat Pushes Rider to Block NLRB's Joint Employer Ruling

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By Chris Opfer

June 21 — Rep. Henry Cuellar (D-Texas) June 21 said he has asked House appropriators to add language to an upcoming spending bill that would block the National Labor Relations Board's recent joint employer ruling.

Cuellar, who sits on the Appropriations Committee, said he expects panel members to take up the FY 2017 Labor, Health and Human Services, Education, and Related Agencies appropriations bill after Congress's July 4 recess.

He said he's pushing for a policy rider that would block the NLRB's decision in Browning-Ferris Industries of California Inc., 362 N.L.R.B. No. 186, 204 LRRM 1154 (2015).

The board expanded joint employer liability under federal labor law in Browning-Ferris by holding that a business may be liable as a joint employer if it indirectly controls an employment relationship or has reserved the right to do so.

The board said it was simply updating existing law to reflect modern workplace realities, but opponents have criticized a decision they say muddies the waters for employers across industries.

Critics of the decision were nearly able to add a rider onto last year's omnibus spending bill.

The U.S. Chamber of Commerce and International Franchise Association are expected to again lobby aggressively for the provision, but they'll likely need more Democratic support for it to be successful this time around.

‘One Train.'

Cuellar said the rider's fate likely will be determined late in the game, as lawmakers scramble to shore up federal government funding shortly before the end of the fiscal year.

Although Republican leaders in both chambers have said they want to move spending bills individually, Congress is expected to once again use a single omnibus package to fund the government in the next fiscal year.

That means Cuellar's rider—like others challenging a variety of Obama administration labor initiatives—will likely be negotiated behind closed doors instead of through the amendment process.

“The bottom line when you look at the legislative process is that there's one train that has to leave at the end of the year, and that's the appropriations bill,” Cuellar said. “The fight is not adding it in at the Appropriations Committee; the fight is going to be at the end of the year.”

Cuellar was speaking at an event hosted by the Chamber and the IFA. The groups rolled out a paper detailing what they say are the negative effects of the decision on franchise and small businesses.

‘Cautiously Optimistic' on Appeal

Management-side lawyers who participated in the event said the board's analysis of whether a business should be considered a joint employer comes down to a vague determination about whether it controls the employment relationship of workers for a contractor, franchise or other related entity.

Harry I. Johnson, a former board member who wrote a dissenting opinion in the Browning-Ferris case, said that's left employers uncertain about their business relationships and potential liability.

“There is no device to just walk up to a set of employees and say well who is their employer?” said Johnson, now a partner at Morgan Lewis.

Johnson said the NLRB made clear that specifying an expected result in a contract with another entity will not alone make a business a joint employer. Still, the board said a business could be liable as a joint employer if it “affects the means or manner of the employees' work and terms of employment.”

“From the point of view of business planning, there is a vast gray area there,” Johnson said. “The fact is, a lot of us are going on intuition until the National Labor Relations Board fills in the dots.”

Supporters of the decision, including NLRB General Counsel Richard F. Griffin, have said the expanded standard will allow the board to consider employment relationships on a case-by-case basis.

They've also balked at the idea that the decision will wipe out the franchise business model, arguing instead that the standard better reflects the complex employment arrangements in place at many workplaces across the country.

Johnson said he is “cautiously optimistic” that the U.S. Court of Appeals for the D.C. Circuit will at least whittle down the Browning-Ferris decision and provide some additional clarity for businesses when it eventually weighs in on the case.

The appeals court has been “notoriously unreceptive to the idea that you can retreat from the common law employer-employee test,” he said.

Standard Spreading

A separate panel of employer-community lawyers also warned that they're seeing similar joint employer expansions creeping into other administrative agencies' interpretation of labor and employment law. That includes the Labor Department's Wage and Hour Division, according to former WHD chief Tammy McCutchen.

“Because of all this concern about NLRB's activities around joint employment, I have long felt that DOL's attack on joint employment has gone a bit under the radar,” said McCutchen, a partner at Littler Mendleson.

McCutchen pointed in particular to a January administrator's interpretation in which current WHD Administrator David Weil said joint employer liability should be interpreted “as broad as possible” under the Fair Labor Standards Act. She said the DOL is likely to use this guidance to go after large businesses and franchisers for minimum wage and overtime violations by smaller businesses and franchises with whom they have a relationship.

Baruch Fellner, a partner at Gibson, Dunn & Crutcher, said the Occupational Safety and Health Administration has also signaled that it wants to expand joint employer liability for workplace safety violations.

A draft memo leaked last summer suggested that the OSHA lawyers are mulling whether a franchiser may be liable under a more broad view of the joint employment relationship.

To contact the reporter on this story: Chris Opfer in Washington at

To contact the editor responsible for this story: Susan J. McGolrick at

For More Information

Text of the paper from the Chamber and the IFA is at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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