In a landmark decision overturning 30 years of established precedent, the National Labor Relations Board (NLRB) has expanded the definition of “joint employment” for purposes of assessing joint-employer status under the National Labor Relations Act (NLRA). See Browning Ferris Industries of California et al v. Sanitary Truck Drivers and Helpers, Local 350, Case 32-RC-109684 (August 27, 2015). As a result, staffing agencies and the businesses to which the agencies provide workers are more likely to be found to be joint employers for the purposes of the NLRA. In a split 3-2 decision, the NLRB held that the joint-employer standard it previously used is the result of its imposing additional and narrower standards than compelled by the NLRA or by the common law definition of the employment relationship. Acknowledging that control over the work is the central inquiry in the joint-employer determination, the NLRB has now decided that an employee need not show that the putative employer’s control was actually exercised or that such control was direct and immediate. Instead, even the unexercised ability to control, or control exercised indirectly – such as through an intermediary – may establish joint-employer status. Ultimately, the NLRB held that it may find that two or more companies are joint employers of the same worker if they “share or codetermine those matters governing the essential terms and conditions of employment.”

Factual Background -

Browning Ferris Industries (BFI) contracts with Leadpoint Business Services to provide workers to perform sorting and cleaning services at a BFI recycling facility. The agreement between BFI and Leadpoint provides that Leadpoint is the sole employer of its workers and that nothing in the agreement was to be construed as creating an employment relationship between BFI and Leadpoint’s workers. Per the agreement, Leadpoint would be responsible for recruiting, interviewing, testing, selecting, hiring, disciplining, reviewing, evaluating and terminating its employees assigned to the BFI site. Leadpoint employs onsite supervisors and human resources staff who manage its employees at the BFI facility on a day-to-day basis. Leadpoint also solely determines its workers’ pay rates, although it cannot pay a rate in excess of that of a BFI full-time employee performing similar tasks. As would be expected, BFI retained control over many aspects of its business by, for example, establishing the facility’s schedule of working hours and determining how much and which recycled material streams ran through the facility.