Labor Board Wants to Send Joint Employer Case Back to D.C. Cir. (1)

From Labor & Employment on Bloomberg Law

March 2, 2018

By Lawrence E. Dubé and Chris Opfer

A federal appeals court in Washington may weigh in on a controversial National Labor Relations Board decision on joint employment liability after all.

The NLRB March 1 asked the U.S. Court of Appeals for the District of Columbia Circuit to reopen Browning-Ferris Industries and resume the court’s review of the 2015 board decision that expanded the agency’s interpretation of joint employment under the National Labor Relations Act.

The board has recently made several abrupt changes in its joint employer policy, leaving employers uncertain about what the board’s position is today and what it may be in the future. The possibility that the appeals court may announce its own ruling on Browning-Ferris may add to the confusion.

The appeals court can uphold Browning-Ferris or reject it, but it may also hold the NLRB ruling was merely one possible interpretation of the NLRA, leaving the board room to develop and adopt another reading of the law.

Joint Employment Test Unsettled

The Obama-era board said in its 2015 Browning-Ferris ruling that a business that exerts indirect control over another business’s workers can be considered their “joint employer” in NLRB election cases and unfair labor practice proceedings. That decision drew criticism from employers and business groups that the NLRB standard created confusion about the bargaining obligations and business relationships of franchisers and franchisees, contractors and subcontractors, and other business entities. The board’s ruling sparked criticism of the agency and a vigorous effort to tighten the joint employment standard in Congress.

Browning-Ferris appealed the controversial ruling to the D.C. Circuit, which heard oral arguments in March 2017 but never ruled on the appeal.

In December, a new Republican-majority NLRB decided 3-2 in Hy-Brand Industrial Contractors to overrule Browning-Ferris and return to a position that multiple entities can be considered joint employers of a group of employees only if each has exercised direct and immediate control over a group of employees.

The NLRB advised the D.C. Circuit of its Hy-Brand decision and asked the court to remand Browning-Ferris so the board could take appropriate action in light of the new joint employer ruling. The court granted the request and sent Browning-Ferris back to the board, but Hy-Brand unraveled within a few weeks.

Hy-Brand Case Vacated

One of the Republican board members who formed the majority in Hy-Brand was William J. Emanuel, who was appointed by President Donald Trump and confirmed by the Senate in September. Emanuel’s former law firm, Littler Mendelson PC, represented Leadpoint, a staffing company that was a party in the Browning-Ferris case at the NLRB.

The staffing firm didn’t participate in the D.C. Circuit proceeding, but the NLRB’s inspector general issued a report that because of his connection to Littler Mendelson and its connection to Leadpoint, Emanuel shouldn’t have participated in deliberations or voting on Hy-Brand.

Citing the inspector general’s report, the board vacatedHy-Brand and announced “the overruling of the Browning-Ferris decision is of no force or effect.”

Writing for the board, NLRB Deputy Associate General Counsel Linda Dreeben told the court that the board’s unusual about-face means that Browning-Ferris is again “current Board law” and “the issue as to enforcement of the Board’s order” that first brought the case to the D.C. Circuit is “exactly as it was prior to the remand.”

The NLRB asked the appeals court to resume processing the appeal of the NLRB’s 2015 joint employer decision. Unless the court sets a different time limit, court rules generally allow 10 days for responses to a motion.

Representatives of Browning-Ferris and Teamsters Local 350, an intervenor in the D.C. Circuit case, didn’t immediately respond to requests for comment on the NLRB motion.

The case is Browning-Ferris Indus. of Calif., Inc. v. NLRB, D.C. Cir., No. 16-1028, motion 3/1/18.