NLRB Changes Course on Joint Employment Test—at Least Temporarily

    We recently reported[1] that the National Labor Relations Board (“NLRB”), in its Hy-Brand Industrial Contractors decision, had restored the “traditional test” for determining whether two or more businesses are joint employers (whereby two or more entities will be deemed joint employers where one entity actually exercised control over another entity’s employees) and rejected the Obama-era Browning-Ferris decision (in which a business can be deemed a joint employer if it merely had indirect or potential control over another entity’s employees, even if it never exercised such control).[2]  In the past two weeks, the NLRB has (1) vacated its Hy-Brand decision on procedural grounds[3]; and (2) asked the U.S. Court of Appeals for the District of Columbia Circuit to continue its review of the Browning-Ferris decision, which was pending before that court at the time the NLRB issued its decision in Hy-Brand.

    Based on the current makeup of the Board,[4] it is possible the NLRB will not re-consider the joint employer issue for several months, if not longer. As a result, businesses are again at risk of being deemed a joint employer under the National Labor Relations Act even if they merely have indirect or potential control over workers who are formally employed by another entity. Companies that have concerns about joint employer liability (in particular franchisors, businesses that contract a part of their workforce, and staffing companies) are encouraged to consult with employment counsel to discuss minimizing legal risks. 

[1]NLRB Reverses Obama-era Joint Employer Ruling, Rocky Mountain Employer Blog, Campbell Litigation P.C. (Dec. 28, 2017), http://www.rockymountainemployersblog.com/blog/2017/12/28/nlrb-reverses-obama-era-joint-employer-ruling

[2] Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017).

[3] 366 NLRB No. 26 (2018). The Board determined that Board member William J. Emanuel should have disqualified himself from the decision because he is a former partner at the law firm that represented a party to the Browning-Ferris decision.

[4] Currently there is a 2-2 split among management- and employee-leaning board members. Member Emanuel likely would continue to recuse himself from a joint employer decision while the Browning-Ferris case remains pending on appeal. The U.S. Senate is currently considering President Trump’s nominee for the fifth NLRB board position, John Ring.