Joint Employment Rules Takes Another Turn With NLRB Decision
Joint employment, or the sharing of control and supervision of an employee’s activity among two or more business entities, has been on a roller coaster ride in recent months.
Browning-Ferris Industries of Calif.
Hy-Brand Industrial Contractors
[W]e overrule Browning-Ferris and restore the joint-employer standard that existed prior to the Browning-Ferris decision. Thus, a finding of joint-employer status requires proof that the alleged joint-employer entities have actually 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.”
Bravo. Employers rejoiced.
The Celebration was Short-Lived
On Feb. 26, 2018, the NLRB vacated Hy-Brand, restoring Browning-Ferris (and its potential/indirect control tests) as the law of the NLRA on joint employment.
Because current NLRB board member Bill Emanuel, one of the three votes in Hy-Brand in favor of overturning Browning-Ferris, was a partner at the law firm that represented Browning-Ferris in 2015. This decision followed the report of NLRB inspector general David Berry earlier this month, which concluded that Emanuel should have recused himself from Hy-Brand, not because Emanuel engaged in anything improper, but because the appearance of a potential conflict should have caused his recusal.
For now, Browning-Ferris remains the law on joint employment under the NLRA. And, it likely will continue as such, as without Emanuel, the highly politicized NLRB will almost certainly split 2-2 on any rehearing of Hy-Brand.
Browing-Ferris had been pending on appeal and awaiting decision. The D.C. Circuit Court of Appeals, however, dismissed the appeal and remanded the case back the NLRB for disposition consistent with Hy-Brand. You should now expect more litigation over that issue in the D.C. Circuit.
As you can see, this issue is a muddled mess.
One easy solution is the federal (and bipartisan) Save Local Business Act. It expressly defines a “joint employer” under the NLRA and FLSA as one that —
directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, or administering employee discipline.
It passed the House last November, and now awaits action in the Senate.
This past summer, I asked if joint employment was the issue to unite our divided country. For the sake of America’s small-business owner, I certainly hope it does. If you are concerned about this issue (and you should be), call or email your Senator and Congressperson to urge their support of the Save Local Business Act.
Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email firstname.lastname@example.org. Follow Hyman’s blog at Workforce.com/PracticalEmployer.