Court upholds NLRB's Browning-Ferris joint-employer test

In 2015 the NLRB revised its joint-employer test by (1) putting the focus on whether a putative employer has the right to control the workers (even if that right is not exercised) and (2) considering indirect control (not merely direct control) as a factor. The DC Circuit has affirmed that formulation, although the case was remanded for greater articulation of the scope of "indirect" control. Browning-Ferris v. NLRB (DC Cir 12/28/2018) [PDF]

Most workers at Browning-Ferris's recycling plant are employed by a staffing company, who “has the sole responsibility to counsel, discipline, review, evaluate, determine pay rates, and terminate” the workers that it provides. When a Teamsters union petitioned to represent these workers, the NLRB decided that Browning-Ferris and the staffing company were joint-employers of the workers.

The DC Circuit held that "the right-to-control element of the Board’s joint-employer standard has deep roots in the common law. The common law also permits consideration of those forms of indirect control that play a relevant part in determining the essential terms and conditions of employment. Accordingly, we affirm the Board’s articulation of the joint-employer test as including consideration of both an employer’s reserved right to control and its indirect control over employees’ terms and conditions of employment." However, the court faulted the NLRB for failing to distinguish evidence of indirect control that bears on workers’ essential terms and conditions from evidence that simply documents the routine parameters of company-to-company contracting. Therefore, the court remanded to the NLRB for it to "explain and apply its test in a manner that hews to the common law of agency."

DISSENT: The dissent would have issued no decision at all because the NLRB is now engaged in a rulemaking process directed at precisely the issues that were decided in this case. On the merits, the dissent argued that under the common law "employees of a true independent contractor [here, the staffing company] cannot be considered employees of the company [here, Browning-Ferris] who hired the contractor." The dissent also faulted the majority for ignoring the fact that the common law of joint-employer may vary according to the nature of the business arrangement between companies.

NOTE: The NLRB is engaging in a rulemaking process regarding its joint-employer standard. Interested parties may file comments on or before Monday, January 14, 2019.