Joint Employer Debate Takes a Twist in California

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By Chris Opfer

Workers at the center of a closely watched dispute over liability for businesses that use staffing arrangements may be close to resolving a separate complaint against another company that also doesn’t want to be tagged as their employer.

An appeals court in Washington, D.C., is expected to soon decide a hot-button lawsuit challenging whether Browning-Ferris Industries is the joint employer of sorters, screen cleaners, and housekeepers provided by a staffing company to work at BFI’s California recycling plant. That decision comes as courts and legislators are grappling with how to determine who is an employer for liability purposes and could affect workers and businesses in a wide range of industries.

In the meantime, the San Jose City Council is scheduled June 26 to decide whether to settle a separate complaint that those same workers weren’t paid the living wage required for contractor employees. A proposed agreement would arguably acknowledge that the workers are not the employees of Republic Services Inc., a third company that hauls waste to the facility.

“Allied Waste Services of Santa Clara County is pleased that we have resolved this outstanding matter in a way that is agreeable to the city and our company,” Mike Caprio, a Republic Services area president, told Bloomberg BNA via email. “We look forward to our continued partnership and assisting the city with their waste reduction goals.”

Republic Services acquired Allied Waste in 2008.

Labor Board Ruling

The National Labor Relations Board turned some heads in 2015 when it ruled that BFI was required to negotiate with some 240 workers provided by Leadpoint Business Services to work at the Newby Island recycling plant. The decision has been panned by business groups and Republican lawmakers as a threat to the way franchise and other companies do business.

But the San Jose case is an example of the complicated web of contractual relationships that advocates say make it tough for workers to have a seat at the table with the business that actually sets the terms and conditions of their jobs.

“In our opinion, if the city council goes with this, they’re sort of aligning themselves with the Trump administration and Republicans in Congress,” Doug Bloch, the political director for a Teamsters Joint Council in California, told Bloomberg BNA. The Teamsters have been trying to organize the Newby Island workers and petitioned the NLRB to take up the Browning-Ferris case.

President Donald Trump hasn’t weighed in publicly on the joint employer issue, but lawmakers in the House are expected to soon introduce legislation to undo the Browning-Ferris decision. Trump has two openings to fill on the five-member board, which may eventually get the opportunity to reconsider the joint employer issue with a Republican majority.

City Attorney Richard Doyle and representatives didn’t immediately respond to Bloomberg BNA’s requests for comment.

Avoids Legal Battle

Republic, which has since purchased the facility and calls Browning-Ferris a subsidiary, maintains that the Newby Island workers aren’t their employees and therefore aren’t covered by a San Jose resolution that requires companies that do business with the city to pay their workers more than $21 per hour. The settlement agreement would require the workers to be paid a “Recyclery Workers Wage” of more than $17 an hour and force Newby Island customers to pick up about two-thirds of the tab.

The agreement allows the city to help the workers get some of the money they said they were shorted without an extended court battle, Doyle said in a memo to San Jose Mayor Sam Liccardo (D) and the city council.

“First, the sorters and housekeepers at the Recyclery will receive some restitution in wages sooner rather than later,” Doyle wrote. “Long and protracted litigation would have thwarted this goal. Second, the sorters and housekeepers will earn more than the minimum wage in the near term. This goal would likewise have been thwarted by long and expensive litigation.”

San Jose’s living wage resolution requires contractors doing business in the city to pay workers $21 per hour if the contractor does not offer health benefits. It includes workers employed by the contractor as well as those employed by any subcontractors.

The Teamsters say the city is abandoning its position that the workers are Republic employees by agreeing to the separate wage rate. Four council members have asked that a vote on whether to approve the settlement be pushed back until August.A California ordinance that took effect in 2015 makes employers liable for staffing firms or “labor contractors” that don’t pay minimum wages and overtime or fail to provide workers’ compensation.

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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