The National Labor Relations Board’s new, expanded “joint employer” standard faced sharp criticism during oral argument at the United States Court of Appeals for the District of Columbia Circuit.
In Browning-Ferris, the Board created a broad new standard for determining whether two entities are joint employers. The case involved Browning Ferris Industries of California, Inc. (BFI) and a staffing agency that provided workers for BFI, Leadpoint Business Services, Inc. (Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015). [hyperlink to our article])
The Board held that “control” by an employer over employees necessary to establish it as a joint employer can be established directly or indirectly (such as through an intermediary or through contractual provisions that preserve the right to control, whether or not that right is ever exercised). The Board’s decision was appealed to the United States Court of Appeals by BFI.
During oral argument, the new standard was referred to by the panel as “unworkable” and “unclear.” Judge Patricia Millett said the Board “dropped the ball” in setting the new standard. She noted the Board did not clearly state how much weight would be given to the indirect and “right to control” elements of the standard.
Judge A. Raymond Randolph pointed to an unenforced six-month limitation on employee assignments in the contract between BFI and Leadpoint as an example of what the Board might consider preserved right to control. But Judge Randolph noted that that provision suggests an attempt to avoid having permanent employees and said it seemed to favor BFI’s position.
It is not certain how the Court of Appeals will rule, but the questions and comments during oral argument certainly suggest the decision may be overturned. We will continue to watch this case and provide updates as it unfolds.