Labor Board Restores a More Rigorous Joint Employment Test

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By Lawrence E. Dubé

The National Labor Relations Board has overruled its 2015 Browning-Ferris Industries decision and turned the clock back on the board’s test for determining whether multiple employers are joint employers under the National Labor Relations Act.

Before Browning-Ferris, the NLRB held for some 30 years that multiple entities could be considered joint employers of a group of employees only if each had exercised direct and immediate control over a group of employees. Critics of the rule said the 2015 ruling made it easier for businesses that worked together through staffing and other contractual relationships to be found liable for each other’s workers.

"[W]e return today to a standard that has served labor law and collective bargaining well, a standard that is understandable and rooted in the real world,” Chairman Philip A. Miscimarra (R) and Members Marvin E. Kaplan (R) and William J. Emanuel (R) said in a 3-2 ruling. Direct and immediate control is a prerequisite to a finding of joint employer status, the board majority said.

The board members found that Hy-Brand Industrial Contractors Ltd. in Iowa and Brandt Construction Co. in Illinois are joint employers under the NLRA and they are both responsible for the firing of seven employees who engaged in a work stoppage. But they wrote a lengthy opinion to explain their return to the board’s traditional joint employer test.

In Browning-Ferris, a controversial 3-2 ruling issued when Democrats had a board majority, the NLRB said joint employer status could be supported by evidence that a company merely had indirect or potential control over workers who were formally employed by another entity.

The new Republican majority didn’t mince words in overturning the 2-year old standard, calling the Browning-Ferris decision “a distortion of common law as interpreted by the Board and the courts.”

The case is Hy-Brand Indus. Contractors, Ltd. , 2017 BL 447607, 365 N.L.R.B. No. 156, 12/14/17 .

To contact the reporter on this story: Lawrence E. Dubé in Washington, D.C. at ldube@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

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