Joint employer ruling in Browning-Ferris opens door to organizing and bargaining between workers and the “real” Employer

On August 27, 2015, the National Labor Relations Board (NLRB) expanded its “joint-employer” standard.  Corporations can no longer shift workplace responsibilities elsewhere, nor will they be able to hide behind loopholes to prevent workers from organizing.

The NLRB will find two or more entities are “joint employers” of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment.

In its 3-2 ruling, the NLRB held that Browning-Ferris Industries of California (“BFI”) was a joint employer with its contractor, Leadpoint Business Services.  Leadpoint helped staff BFI’s recycling center.  In finding BFI a joint employer with Leadpoint, the Board relied on indirect and direct control BFI held over essential terms and conditions of employment of the employees supplied by Leadpoint, as well as BFI’s “reserved” authority to control such terms and conditions.

Under this ruling, a company that hires a contractor to staff its facilities may be considered a joint employer of the workers at that facility, even if it does not actively supervise them.  If the two entities are joint employers, a Union representing those workers is now entitled to bargain with the corporation, not just the contractor.

Although the ruling dealt specifically with a California waste-management company, the implications could go much further and the decision serves as a wake-up call to companies that rely on a franchise business model.  Under this ruling, major fast-food brands or hotel chains may be deemed joint employers with their subcontractors or franchisee locations, thus, those corporations could be held liable in a labor dispute brought against the smaller company, and would be obligated to bargain with the workers’ Union.

This ruling is a big victory for workers as it sets a precedent that prevents larger parent companies from avoiding responsibility for labor disputes and negotiations involving workers employed by their subcontractors.

For more information on joint employer issues, contact your labor law counsel.

By Caroline Cohen | September 9, 2015

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