Yesterday, the National Labor Relations Board (NLRB) overruled the 2015 decision in Browning-Ferris Industries (Browning-Ferris), which expanded the criteria used to determine joint employment. This decision has restored the use of the pre-Browning-Ferris standard in determining joint-employer status, erasing the “indirect” or “potential control” Obama-era standard. This decision comes as no surprise after President Trump’s second Board nominee, William Emanuel, was confirmed in September of this year, effectively shifting the balance of power from Democrats to Republicans on the Board.
In Browning-Ferris, the Obama-era Board eliminated the requirement that joint employer’s control over employees be direct and immediate and held that the mere right to exert indirect or potential control was sufficient for joint employer status. Under the now overruled test, the Board expanded potential joint employer scenarios to potentially include contractor-subcontractor relationships and franchisor-franchisee relationships.
Under the revived standard, two employers are found to be joint employers only when they exerted such direct and significant control over the same employees that they shared or co-determined matters governing the essential terms and conditions of employment. Relevant factors in making this assessment included the right to hire, terminate, discipline, supervise, and direct the employees. In applying this test, alleged joint employer control must have been actual, direct and substantial, not simply theoretical, possible, limited or routine as was the case under Browning-Ferris.
The Board’s decision yesterday comes on the wave of political turnover as President Trump’s nominees start to settle into their new appointments. The Board’s decision is seen as a win for employers and a pro-management shift for collective bargaining. Employers should now begin to reevaluate whether they are subject to joint employment status. If you have questions about whether you might be considered a joint employer, feel free to contact one of our labor attorneys by calling (501) 371-9999.