In our Winter 2018 edition of Perspectives, we reported on an important ruling from the NLRB December 14, 2017 overturning a controversial joint employer test. (See NLRB Overturns Joint-Employer Test). The case was Hy-Brand Industrial Contractors, 365 N.L.R.B. No. 156 (Dec. 14, 2017). On February 26, 2018, the NLRB overturned Hy-Brand due to a conflict of interest of one of the Board members who voted in the matter. The conflict disqualified the Board member’s vote, leading to a tie.
The Hy-Brand case provided a new “joint employer” test to determine whether a host company may be responsible for another company’s worker or temporary worker. The National Labor Relations Act (NLRA) governs the rights and obligations of employers and their employees with respect to labor-relations. The employer’s obligations become less-clear, however, with respect workers who are provided to the employer from staffing firms or other agencies.
The NLRB has previously ruled that both the host company and the agency have obligations to the employee if they are “joint employers.” Under the NLRA, a “joint employer” consists of two or more separate entities that “share or codetermine” matters governing a workforce’s essential terms and conditions of employment. Historically, this meant the party advocating for joint-employer status must provide evidence of the following: (1) that the alleged employer had direct and immediate control over the workforce, (2) that the alleged employer exercised that control in practice, and (3) that the employer’s exercise of that control was/is substantial and not “limited and routine.”
In 2015, the NLRB issued a controversial decision in Browning-Ferris Industries, Case 32-RC-109684, significantly expanding its standard for assessing joint-employer status of workers. In Browning-Ferris, the Board held that it was no longer required that an entity actually or directly exercise control over the worker to be considered its joint employer, so long as it reserved the authority to determine matters governing the terms and conditions of employment. The Board found that two separate legal entities (i.e. employers) could be considered joint employers of a group of employees if they both exercise at least “indirect control” over the essential terms and conditions of employment.
On December 14, 2017, the NLRB reversed the Browning-Ferris rule in its Hy-Brand decision. However, with the Hy-Brand decision now overturned, the joint employer test is again covered by the Browning-Ferris decision.
Attorneys at FHKAD routinely draft, advise and defend employers with respect to their policies and union relations, and regarding host-company to staffing-agency rights and obligations. Feel free to contact David Riepenhoff, driepenhoff@fishelhass.com, or Daniel Sabol, dsabol@fishelhass.com, by email or at (614) 221-1216.