National Labor Relations Board Refines Joint Employer Status Standard
Date Published: 08-28-2015
In a 3 to 2 decision yesterday, August 27, 2015, involving Browning-Ferris Industries ("BFI") of California, the National Labor Relations Board ("NLRB") refined its standard for determining joint-employer status, essentially facilitating negotiations by unions on behalf of workers at fast-food chains and other companies relying on contractors and franchisees.
The revised standard is designed " . . . to better effectuate the purposes of the (National Labor Relations Act) in the current economic landscape." With more than 2.87 million of the nation's workers employed through temporary agencies in August 2014, the NLRB held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.
In the decision, the NLRB applied long-established principles to find that two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment.
In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the NLRB will--among other factors-- consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.
In its decision, the NLRB found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various work functions for BFI, including cleaning and sorting of recycled products. In finding that BFI was a joint employer with Leadpoint, the NLRB relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint, as well as BFI's reserved authority to control such terms and conditions.
The NLRB ordered yesterday that, within 14 days, the ballots that were impounded on April 25, 2014 must be counted and the appropriate certification issued.
NLRB Chairman Mark Gaston Pearce was joined by Members Kent Y. Hirozawa and Lauren McFerran in the majority opinion; Members Philip A. Miscimarra and Harry I. Johnson III dissented.
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