NLRB Joint Employment Decisions: One Down and One To Go
On August 27, 2015, the National Labor Relations Board (“NLRB” or “Board”) issued its decision in Browning Ferris Industries of California, Inc., 362 NLRB No. 186 (2015). Via this decision, the Board significantly altered its test for joint employer status such that it will find joint employment in more circumstances.
The Board summarized its new test as follows. The first question is whether there is a common law employment relationship between the employer and employees in question. If such a relationship exists, the next issue is “whether the putative joint employer possesses sufficient control over the employees’ essential terms and conditions of employment to permit meaningful collective bargaining.”
With respect to whether there is a common law employment relationship, the Board wrote that it would look to common law principles of agency. In general, under those principles an employee “is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other’s control or right to control.” If this sounds familiar, it should. The fundamental analysis is similar to that utilized when considering whether someone is an employee or an independent contractor. The Board recognized in its decision that this is at times not an easy determination to make, and that it will involve fact specific analysis.
In a comment that provides insight into how the Board will view certain arrangements, the decision quoted the following from an agency law source: “[i]f the work is done upon the premises of the employer with his machinery by workers who agree to obey general rules for the regulation of the conduct of employees, the inference is strong that such workmen are the servants of the owner…” This describes thousands of circumstances wherein manufacturers and others utilize on-site employees from temporary employment agencies.
The Board also emphasized that the right to control material aspects of employment, whether exercised or not, is probative of joint employer status. For example, the ability to reject employees, or to demand their removal, even if not exercised, tends to establish joint employer status.
Assuming that common law employment status exists, the Board will determine whether to find joint employer status or not by inquiring whether the putative joint employer possesses sufficient control over terms and conditions of employment to permit meaningful collective bargaining. The following are examples of terms and conditions of employment that are commonly subjects of collective bargaining: hiring, firing, discipline, pay and benefits, hours and scheduling (for example, the starting and ending time of shifts), work processes (e.g. the speed at which the production line runs), training and safety.
An employer who controls such terms and conditions, or who has the right to control them, with respect to persons employed by a contractor is likely to be found a joint employer of the contractor employees. As a result, that employer will now be required to bargain over those terms and conditions that it controls or has the right to control.
Interestingly, the Board noted more than once that “a joint employer will be required to bargain only with respect to those terms and conditions over which it possesses sufficient control for bargaining to be meaningful.” This raises a likelihood of bargaining posturing, and possibly NLRB litigation, over whether or not a given employer does or does not possess sufficient control to bargain over a given term or condition of employment.
In short, the Browning Ferris decision broadens the circumstances under which the Board will find that joint employer status exists. Employers who are concerned about this should review their arrangements with other employers and determine whether they desire to effect revisions in an effort to avoid joint employer status. It would be wise to involve labor counsel in that process.
Browning Ferris is the “one down” on the NLRB’s joint employer “to do” list. Miller & Anderson, Inc. is the “one to go.” The current NLRB rule is that where joint employer status exists both employers must consent for the employees to be part of a multi-employer bargaining unit. In other words, both employers cannot be compelled to bargain together with the employees in a unit.
It appears very likely that the Board will change this rule. In May, the Board accepted review of a Regional Director’s decision in Miller & Anderson. In July, the Board invited briefs in that case on the subject of whether it should change the current rule, and find that where joint employment exists both employers can be compelled to bargain with the employees’ representative as a multi-employer bargaining unit.
If the Miller & Anderson case is decided as expected, the one-two punch in the joint employment analysis will be as follows: (1) joint employment status will be easier to establish and found to exist more often (Browning-Ferris); and (2) where joint employment exists, both employers will be compelled to bargain with the union in a multi-employer unit (Miller & Anderson).
And all of this is to say nothing of the McDonald’s cases which remain pending. Stay tuned.