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Divided NLRB Drops Existing Rule, Adopts Union-Friendly Joint Employer Standard

August 28, 2015

By Michael G. McClory

Yesterday, a divided National Labor Relations Board dropped another hammer on the employer community.  In a long-awaited and much debated move, the Board jettisoned the decades old standard for determining when two independent businesses should be considered joint employers of an individual worker for collective bargaining purposes.

As stated in our May 21, 2014 Bullard Alert, under the now discarded joint employer standard required a showing that the alleged joint employer “meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.”  The quoted language is taken directly from the Board’s decision in TlI, Inc., 271 NLRB 798 (1984).

Under the new standard announced yesterday in Browning-Ferris Industries of California, Inc., the Board effectively excises the “meaningful” out of the requirement that both businesses “meaningfully” affect employment matters.  The Board states:
“We will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority.  Reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry.”

The Board’s new standard has the potential to impact unfair labor practice liability and bargaining obligations in various contexts, including for the parent in parent-franchisee situations and for the acquiring company in temporary or leased worker arrangements. 

In a lengthier Bullard Alert, we will be discussing the reasoning and anticipated impacts of the Board’s Browning-Ferris Industries decision.  Look for that Bullard Alert next week.  In the meantime, please feel free to call or email with questions.

The Bullard Edge