Joint Employer Finding Against CNN Rejected by D.C. Circuit

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By Lawrence E. Dubé

An NLRB finding that CNN America and a technical service company were joint employers “cannot stand,” the U.S. Court of Appeals for the District of Columbia Circuit ruled Aug. 4 ( NLRB v. CNN Am., Inc. , 2017 BL 272464, D.C. Cir., No. 15-1112, 8/4/17 ).

The National Labor Relations Board failed to explain how the television company and Team Video Services satisfied its traditional requirement that joint employers share “direct and immediate” control over a group of employees, Judge Merrick B. Garland said, writing for a unanimous court.

The decision is a “good sign” for employers that want to limit the expanded theory of joint employment liability the board set out in the 2015 Browning-Ferris Industries of California v. NLRB decision, Angelo Amador, executive director of the National Restaurant Association’s Restaurant Law Center, told Bloomberg BNA Aug. 4 . The Browning Ferris decision was appealed and the case currently is pending before the D.C. Circuit, with a ruling expected soon.

The CNN decision is encouraging for several reasons, Amador said. The three-judge panel was unanimous in rejecting the board’s joint employer finding and in finding that the board’s requirement for direct and immediate control in a joint employer relationship was the controlling board law for three decades.

If Browning-Ferris loses in the D.C. Circuit and decides to take the issue to the Supreme Court, Amador said, his group will support the company. On the other hand, if the D.C. Circuit remands the case to the NLRB, Amador said “we’ll see what happens” when the board has a Republican majority and a new general counsel. “Either way, we’re in good shape,” he predicted. The Restaurant Law Center joined in amicus briefs supporting both CNN and Browning-Ferris in the D.C. Circuit.

Board Didn’t ‘Grapple’ With Precedents

In the current case, CNN had entered several agreements with TVS but eventually terminated the relationship. The NLRB found the cable news company supervised the subcontractor’s employees, played a decisive role in TVS-NABET negotiations and “exerted significant control over the essential terms and conditions of employment of the TVS employees.”

The board as a result found the companies were joint employers, and CNN therefore had an obligation to bargain with the NABET locals. But the court rejected the joint employer finding.

The NLRB analysis of the CNN-TVS relationship was inconsistent with the agency’s precedents, Garland said. The agency is free to overrule precedents and change policies, but it must provide “a reasoned explanation for its change of course.”

The NLRB cited its 1984 decisions that set the joint employer standard for more than 30 years, but the board seemed to ignore the precedents’ requirement that joint employers share “direct and immediate” control over labor relations, Garland said, though he noted that the court wasn’t ruling the companies couldn’t be considered joint employers.

Remanding the CNN case to the board for reconsideration, Garland said the board can re-examine CNN’s status under the traditional joint employer standard, or it can develop a new standard, but it may not ignore or gloss over the requirements of its existing precedents.

CNN America’s counsel declined to comment on the decision. Other attorneys involved in the appeal didn’t immediately respond to requests for comment.

Judge Cornelia T. L. Pillard joined in the opinion. Judge Brett M. Kavanaugh concurred in the ruling on joint employer status but dissented from other rulings in the unfair labor practice case.

Kannon K. Shanmugam of Williams & Connolly argued for CNN America Inc. Keith R. Bolek argued for NABET Locals 11 and 31. NLRB attorney Joan E. Hoyte-Hayes argued for the board.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

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

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

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