For several years we have been providing updates on the Obama-era National Labor Relations Board’s rather employer-unfriendly joint employer standard. We have yet another. We believe the final episode in this saga should be good news for employers. We’re just not sure whether the good news will come from the Courts, from the regulatory process, or both.
This may be hard to follow, but stay with us…
To recap, in 2015, the Obama Board issued a decision in Browning-Ferris Industries of California, and vastly expanded the situations in which a franchisor or a source employer could be deemed a joint employer with its franchisee or with a supplier of a contingent workforce. All that needed to be shown under this new standard was some reserved ability by the franchisor or source employer to potentially control the terms and conditions of the other entity’s employees. To the relief of employers, Browning-Ferris quickly appealed this decision to the United States Court of Appeals for the D.C. Circuit.
As we reported in the Spring of 2017, the Board’s new standard appeared to receive a cool reception from the Court of Appeals during oral argument. We waited and waited, but no opinion came from the Court.
Then, in December 2017, the Trump Board decided Hy-Brand Industrial Contractors, and announced that it would return to the prior standard that required proof of a joint employer’s actual exercise of control over essential employment terms, rather than merely having reserved the right to exercise control. After Hy-Brand was issued, Browning-Ferris was no longer relevant, so the Court of Appeals remanded that appeal back to the Board. All appeared to be right in the world.
Alas, this return to normalcy was short-lived. In late February 2018, the Board issued an Order vacating Hy-Brand based on a determination by the Board’s Ethics Official that one of the three Members who participated in the matter should have been disqualified. With that disqualification no Board quorum existed. So, what next? The Board asks the Court of Appeals for a “do-over”: please recall Browning-Ferris and issue a decision. Please?!
On April 6, a divided Court of Appeals granted the Board’s request and recalled Browning-Ferris, and just like 2017, we again await that appellate decision.
But hold on. There’s more. Yesterday the Board announced that it is considering rulemaking to address the standard for determining joint-employer status. That would be actual regulations, folks. New Board Chair John Ring’s comments accompanying the announcement are telling: “Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today. The current uncertainty over the standard to be applied…undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be.”
So, stay tuned for more news. We know it’s coming. Just not sure which channel will air it first.