From the moment the National Labor Relations Board handed down its joint-employer ruling in the 2015 Browning-Ferris case, it was considered controversial by many labor law practitioners. The decision was so controversial that it was immediately challenged and is still on appeal in the federal court system.
After President Donald Trump was given the opportunity to reshape the makeup of the board in 2017, the Browning-Ferris standard was reversed in a new decision, Hy-Brand Indus. Contractors Ltd.
However, the board rescinded Hy-Brand a few months later after an ethics investigation determined that one of the new board members, William Emanuel, shouldn’t have participated in the decision because of his previous ties to the employers in the Browning-Ferris case.
As a result, the board’s joint-employer standard has technically reverted to the one set out in Browning-Ferris, though the Hy-Brand standard is expected to be adopted through the rulemaking process.
Browning-Ferris Criticized by Many
Many people criticized the Browning-Ferris standard for being overly broad, as it doesn’t require direct and immediate control over terms and conditions of employment, but rather permits a finding of joint-employer status based on theoretical and indirect control. This means that even the potential to affect terms and conditions of employment, whether exercised or not, will permit a joint-employer finding.
Louis DiLorenzo, a managing member and chair of the Labor & Employment, Employee Benefits & Immigration Practice Group at Bond, Schoneck & King in New York City, says that the Browning-Ferris standard is a logistical nightmare for collective bargaining purposes.
“To negotiate with an entity with theoretical or unexercised control is a waste of time and recipe for disaster in collective bargaining and any contract that could result,” DiLorenzo said. “Bargaining is difficult enough without adding a third party who has theoretical but not immediate and direct control over terms and conditions of employment. Imagine a joint employer with an unknown agenda, not the real employer, having a place at the bargaining table.”
DiLorenzo said the use of rulemaking to define the board’s joint-employer standard and establish procedures for dealing with joint-employer allegations in both representation and complaint cases would allow for efficiency and provide stability through consistent and predictable results.
Hy-Brand Establishes ‘Bright Line’ on Control
He also said the standard set forth in Hy-Brand would yield fairer, more realistic determinations with regard to joint-employer status.
More specifically, he said a requirement of immediate and direct control is a practical result so as to make bargaining meaningful. Having such a “bright line” enables employers to assess the possibility of joint-employer status when they enter into relationships with subcontractors, suppliers, and vendors.
In contrast, it would make no sense to require “involvement and participation in bargaining with an entity that has only theoretical, indirect, and unexercised control over terms and conditions of employment,” DiLorenzo said. “Bargaining needs to be conducted with real employers, those with real control, real skin in the game, and the real power to make decisions concerning bargaining demands that affect terms and conditions of employment.”
What Constitutes ‘Immediate and Direct’ Control?
Under the Hy-Brand standard, an employer needs to have “immediate and direct” control over “essential” terms and conditions of employment in order to be considered a potential joint employer. According to DiLorenzo, this makes collective bargaining negotiations easier and more efficient, and there are very few settings where employees don’t know who controls their work.
“There is nothing theoretical about collective bargaining negotiations or collective bargaining agreements,” DiLorenzo added. “If a group of employees is going to bargain collectively over the typical issues you see in a collective bargaining agreement’s table of contents, it is important that they are negotiating these items with the employer that actually makes those decisions.”
In those rare cases where there is an actual sharing of direct and immediate control over employees (for example, one employee controls wages, and another controls and directs the employees’ work activities), there could be multiple parties involved in bargaining. “In those cases, there would need to be a real division of the terms and conditions of employment for bargaining with each employer,” DiLorenzo said.
Bloomberg Law® helps labor and employment law practitioners provide rapid, accurate and complete advice to clients by bringing together trusted, market-leading Bloomberg BNA content like Daily Labor Report® and treatises like Covenants Not to Compete: A State-by-State Survey and The Developing Labor Law, with a fully integrated, innovative legal research platform. Click here to request a free trial.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)