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NLRB Returns Joint Employer Test to Pre-Browning-Ferris Standard

December 19, 2017

By Mitchell J. Cogen & Lindsey M. Tran

On December 14, 2017, the National Labor Relations Board overruled its 2015 decision in Browning-Ferris Industries. The Board held in Browning-Ferris Industries that two entities can be deemed a joint employer even if one does not have direct control over the terms and conditions of employment for workers at the other entity. Under the Browning-Ferris Industries standard, potential control over terms of employment was sufficient to establish joint-employer status.  The consequences of a joint-employer finding are that a primary employer can be held jointly liable for unfair labor practices committed by a separate company that provides it with workers, the primary employer can be picketed during a labor dispute between the secondary employer and the employees provided by the secondary employer, and the primary employer could be forced to bargain with a union representing the employees provided by the secondary employer.

In a 3-2 decision involving Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co., the Board restored the pre-Browning-Ferris Industries standard, which required “direct and immediate” control to establish a joint employer relationship. The Board majority stated that “[a] finding of joint employer status shall once again require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint employer status will not result from control that is ‘limited and routine.’”

With the recent ruling, two or more entities will be deemed joint employers under the NLRA only if there is proof that one entity has exercised control over essential employment terms of another entity’s employees and has done so directly and immediately. In this case, the Board applied the pre-Browning-Ferris Industries standard and affirmed that jointly-owned Hy-Brand Industrial and Brandt Construction exercised the requisite direct and immediate control and were joint employers.  Both companies therefore were deemed liable for unlawfully firing striking workers.
 
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