The NLRB’s roller coaster ride that is its joint employer standard took another sharp turn Monday, when the Board unanimously agreed to vacate its recent employer-friendly joint employer decision and to restore the joint employer standard adopted in Browning-Ferris.
As we described in a previous post, on December 14, 2017, the NLRB overturned its 2015 Browning-Ferris decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. The 3-2 decision in Hy-Brand came on the eve of former Chairman Phillip Miscimarra’s term expiration, while the Board had a Republican majority it had lacked throughout the entirety of the Obama administration. However, complaints began to surface soon after the decision that one of the Republican Board Members, William Emanuel, should have recused himself because his former law firm represented the co-defendant staffing agency in Browning-Ferris.
On February 9, 2018, NLRB Inspector General David Berry sent current board members a memo concluding that Emanuel’s participation in the Hy-Brand decision was “a serious and flagrant problem” that “calls into question the validity of the decision.” In light of this conclusion, in a one-page Order here, the Board unanimously agreed to vacate the Hy-Brand decision.
The Bottom Line
Accordingly, the joint employer standard adopted in Browning-Ferris was reinstated and is now, once again, the governing standard. Under this union and employee-friendly standard, a company with US operations can be a joint employer if it has reserved the right to control workers, even if not exercised.
While the Republican administration controls the Board, the ultimate prosecutorial discretion resides with the various Regional Directors, many of whom were appointed by different administrations. There are no similar cases currently before the Board that will provide an opportunity to overturn the standard with Emmanuel participating in the decision. Accordingly, as long as Emanuel is a Member of the Board, it will be difficult for the Board to overturn Browning-Ferris. However, employers should be aware that Congress is considering legislation that would establish a direct control standard for joint employer liability. If passed, such legislation would overrule Browning-Ferris, which would be a welcome sight for employers who want to get off this up-and-down roller coaster.
Please reach out to your Baker McKenzie lawyer for more details.