All Employers, but especially those using staffing companies, PEOs, and other human capital agencies are once again subject to the expansive joint employer standard for collective bargaining which was imposed in 2015 by a pro-employee National Labor Relations Board (NLRB). If you’re confused, join the crowd, but we hope to explain what happened, and what it means to employers:
- Reversal of Precedent – In 2015, a pro-employee NLRB (2 liberal and 1 conservative Board members) reversed years of precedent and significantly expanded the definition of joint employment in Browning-Ferris Industries, 362 NLRB No. 186.
- Trump Administration – In 2017, President Trump filled the 2 vacant NLRB board positions with conservative appointees and we predicted a flurry of pro-employer decisions.
- Reversal of Reversal of Precedent – In December of 2017, the pro-employer NLRB issued its decision in Hy-Brand Industrial Contractors, Ltd. And Brandt Construction Co., 365 NLRB No 156, and reinstated the limited definition of joint employer which had been applied for decades.
- Reversal of Reversal of Reversal of Precedent – This week, the NLRB issued an Order vacating the decision in Hy-Brand. A copy of the press release and a copy of the Order.
The reason for the decision this week was because Littler Mendelson, the law firm which represented one of the joint-employers in the case, previously employed William Emanuel, the conservative Board member who cast the tie-breaking vote in the 3-2 Hy-Brand decision. This led to ethical concerns, outrage within Congress, and demands for investigation, followed by the NLRB’s Inspector General determination that Mr. Emanuel should have recused himself. In response, the NLRB voluntarily vacated the decision.
What Does This Mean for Employers?
We are back to the extremely broad standard of joint employment for purposes of collective bargaining and federal labor law (NLRA). This is an overwhelmingly union-friendly joint-employer test. Under this standard, two or more employers are joint employers of the same employees if either employer has the ability to directly or indirectly control work conditions of the employees, even if that control is not implemented. If an employer has the right to control the essential terms and conditions of employment (hiring, firing, discipline, supervision, etc.), for employees within another entity, that employer could be a joint employer.
What Must Employer’s Do Now?
Employers must evaluate any co-employment or potential co-employment relationships and the duties and obligations they may create. This applies to all staffing companies, PEOs, and other human capital agencies, and any employer who utilizes those services. This applies to the franchise relationships. And, this applies to any shared workforce.
For additional information, please contact Jeffrey C. Miller, or any member of BMD's Labor and Employment team.