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Client Alert: NLRB Reverses 2015 Browning-Ferris Joint Employer Decision

Staffing companies, PEOs, and other human capital agencies have benefitted from the conservative new appointees to the National Labor Relations Board (NLRB). If you read my post on workplace changes to expect with President Trump, then this post won’t be a surprise.

Yesterday, the NLRB issued a 3-2 decision reversing the Board’s standard for joint employment in collective bargaining that it issued in the 2015 Browning-Ferris decision. That controversial decision by the liberal leaning Board overturned years of precedent and significantly expanded the definition of joint employment.  The decision spurred legislation (H.R. 3441, the Save Local Business Act) to overturn the expansive definition, and replace it with a far more narrow and proper definition of joint employment.

The Board’s decision yesterday accelerated the process and effectively returned the analysis to the narrow definition. Interestingly, in the decision, the Board found the two companies to be joint employers, and then ruled as follows:

We agree with the judge that Hy-Brand and Brandt are joint employers, but we disagree with the legal standard the judge applied to reach that finding. The judge applied the standard adopted by a Board majority in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery (Browning-Ferris). In Browning- Ferris, the Board majority held that, even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not “direct and immediate,” the two entities will still be joint employers based on the mere existence of “reserved” joint control, or based on indirect control or control that is “limited and routine.” We find that the Browning-Ferris standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations. Accordingly, we overrule Browning-Ferris and return to the principles governing joint-employer status that existed prior to that decision….By overruling Browning-Ferris, we also make the Board’s treatment of joint-employer status consistent with the holdings of numerous Federal and state courts. (footnotes and citations omitted, emphasis added).

Here is a link to the NLRB press release

For additional information, please contact Jeffrey C. Miller or any other member of BMD’s L+E team.

CLIENT ALERT: New Opportunity Zone Incentives Promise to Spur Economic Development

Created as part of the recently passed Tax Cuts and Jobs Act, “Opportunity Zones” are designed to encourage long-term investments in underserved communities. By offering tax benefits to private investors who choose to invest their capital at the nexus of need and opportunity, the program supports a broad array of investments and offers opportunity for creative problem-solving strategies to address community needs. The program offers investors tiered tax benefits depending on the term of the investment, including a temporary deferral and partial reduction of unrealized capital gains, as well as the potential to exclude all future appreciation on the investment. The program is designed to tap into the estimated $6T+ of unrealized capital gains held by U.S. individuals and companies by incentivizing investors to re-invest that capital in low-income communities to spur economic development and job creation.

CLIENT ALERT: Medicare Trust Fund to Run Out of Funding Beginning in 2026, Likely to See an Increase in Audits, Overpayment Demands and Extrapolations

Pursuant to a Medicare Trustee Report released on June 5, 2018, the Medicare trust fund will run out of funding beginning in 2026, which is three years earlier than previously expected. Although the Trustee’s report requests that Congress and the President act with urgency to remedy this problem, in the short term, we expect to see an increase in government payer audits, overpayment demands, and extrapolations.

CLIENT ALERT: The European Union's New Data Privacy Law Goes Into Effect

On May 25, 2018, the European Union’s (“the EU”) new data privacy law went into effect. The General Data Protection Regulation (“GDPR”) concerns the processing of personal data that can be searched according to specified criteria such as geographical scope.

CLIENT ALERT: Class Action Waivers in Employment Contracts Upheld by Supreme Court

On May 21, 2018, in a 5-4 decision and a major win for employers, the United States Supreme Court upheld the legality of waivers in employment contracts that prohibit employees from grouping claims together in collective or class actions in favor of individual arbitration proceedings. See Epic Sys. Corp. v. Lewis, ___U.S.___ (2018).

CLIENT ALERT: Prohibition on Recoupment Prior to Exhaustion of Administrative Remedies

In April, the Fifth Circuit Court of Appeals, in Family Rehabilitation, Inc. v. Azar No. 17-11337 (5th Cir. 2018), held that district courts are authorized to enjoin the Centers of Medicare & Medicaid Services (“CMS”) and its contractors from recouping alleged overpayments prior to the completion of the administrative appeal process.