Joint Employment Test Heads Back to NLRB After DC Circuit's Mixed Ruling
Author: David B. Weisenfeld, XpertHR Legal Editor
January 4, 2019
Depending on one's reading, a federal appellate court has either given new life to the Obama-era Browning-Ferris joint employment standard or set it up for the National Labor Relations Board (NLRB) to further chip away at the test.
In a much-anticipated decision, the US Court of Appeals for the DC Circuit agreed with the NLRB's 2015 ruling that indirect control over employees can be a relevant consideration in finding joint employer status.
Circuit Judge Patricia Millett explained, "Traditional common-law principles of agency do not require that control be exercised directly and immediately to be relevant to the joint employer inquiry." An absolute rule against even considering indirect control - no matter how extensively a would-be employer applies pressure over an individual's working conditions - would "flout reality," she added.
However, the lengthy opinion fell well short of a complete endorsement of the broad joint employment standard established in Browning-Ferris. That's because the appellate court suggested the Obama-era NLRB may have waded too far into the routine decisions that employers make when hiring third-party contractors and defining the terms of those contracts.
The court added that, while it had no problem with the NLRB's decision to recognize indirect control as key consideration in the joint-employer analysis, the Board provided no blueprint for what counts as "indirect" control. As a result, the DC Circuit sent the case back to the NLRB to better define its indirect control standard and properly apply it to Browning-Ferris to determine if the company indeed qualifies as a joint employer.
The long-running case already has a rather tortuous history. In December 2017, the Trump NLRB explicitly overturned the Browning-Ferris standard with its employer-friendly Hy-Brand Industrial Contractors decision that said actual supervision is required for joint employment. But that decision was short-lived.
Two months later, the NLRB's inspector general said that one of the board's Republican members, William Emmanuel, should have been disqualified from taking part in Hy-Brand because his law firm had represented one of the parties in the Browning-Ferris decision. This opened the door for a three-member panel comprising two Democrats and one Republican to vacate Hy-Brand, thereby restoring the Browning-Ferris decision.
In Browning-Ferris, another company (Leadpoint) was responsible for paying the workers, as well as providing their benefits and unemployment insurance. However, some workers testified that Browning-Ferris supervisors would occasionally direct the workers' removal of materials or their cleaning of certain areas. Browning-Ferris also allegedly made approved staffing changes.
A dissenting judge criticized the DC Circuit's ruling, saying it added uncertainty to the process. He would have deferred to the NLRB's pending rulemaking proceedings about joint employment. One thing that appears certain is this is likely to be far from the last word on the issue.