Back to Browning-Ferris: Returning to an Obama-Era Joint Employment Standard

February 27, 2018

Yesterday, February 26th, the National Labor Relations Board (NLRB or Board) vacated its December 2017 ruling in Hy-Brand Industrial Contractors (Hy-Brand), reinstating the employee-friendly joint employment standard crafted by the Obama-era Board in Browning-Ferris Industries (Browning-Ferris).

As we previously reported in HR Legalist, Hy-Brand signified a return to the traditional joint employment test, which required actual exercise of direct and immediate control by the alleged joint employer.  Under the Browning-Ferris standard, by contrast, a company can be found a joint employer based on the mere potential to exercise control over terms and conditions of employment, regardless of whether it actually exercised that authority.  Between today’s gig economy and increasing partnerships with temp agencies to fill staffing needs, this is a crucial distinction.

Hy-Brand is not being vacated due to an ideological change of heart per se, but a conflict involving presiding Board member William J. Emmanuel.  Emmanuel’s former law firm, Littler Mendelson, was involved in the original Browning-Ferris decision, and NLRB Inspector General David P. Berry concluded that Emmanuel should have recused himself in a Report dated February 9th.

However, the Board was filled to capacity with three Republicans and two Democrats when Hy-Brand was initially decided along partisan lines on December 14, 2017.  Just two days after the Hy-Brand decision, Republican Philip A. Miscimarra stepped down as Board Chairman, leaving the Board in a partisan deadlock.

Add in the fact that Emmanuel will not be participating in the Board’s reconsideration of the Hy-Brand decision, and it seems almost certain that the Board’s two Democrats, Lauren McFerran and Mark Gaston Pearce, will ensure Browning-Ferris’ resurgence.  Even if President Trump’s pending Board nominee John Ring, a Republican, can be confirmed in time for reconsideration, the vote will still most likely end up 2-2, resulting in a push favoring the Browning-Ferris status quo.

Browning-Ferris still may not be the law of the land for long.  If and when the Board returns to a Republican majority, it can switch to the traditional joint employment standard, again, once an Unfair Labor Practice charge (ULP) involving joint employment issues rises to its review.  The caveat is that there is no telling how long this will take.  ULPs are first decided by Administrative Law Judges (ALJs), and the Board has no say unless one of the involved Parties decides to appeal an ALJ’s decision after the time-consuming initial charge process.

Stay tuned to HR Legalist for further updates regarding this and other NLRB-related issues.  In the meantime, employers with questions about the impact of this decision should contact counsel with experience in traditional labor law matters.

A copy of the Board’s Order vacating the Hy-Brand decision can be viewed here.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

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