D.C. Circuit Court Of Appeals Upholds NLRB’s Browning-Ferris Joint-Employer Test, Cautions Board On Rulemaking

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In a long-awaited decision, the D.C. Circuit Court of Appeals has upheld the controversial joint-employer standard articulated by the National Labor Relations Board in its 2015 Browning-Ferris decision. Browning-Ferris Industries of Calif., Inc. v. NLRB, D.C. Cir., No. 16-1028, 12/28/18.

The Court held that the Board properly considered both the putative employer’s reserved right to control and its indirect control over the employees’ terms and conditions of employment as factors for determining whether businesses should be considered joint employers. The Court wrote, “The Board’s conclusion that it need not avert its eyes from indicia of indirect control—including control that is filtered through an intermediary—is consonant with established common law. And that is only question before this court.”

Although the Board properly considered indirect control as a factor, the Court noted that the Board had “failed to differentiate between those aspects of indirect control relevant to status as an employer, and those quotidian aspects of common-law third-party contract relationships.” In other words, the Board failed to articulate the scope of what it considers “indirect” control.  Consequently, the D.C. Circuit remanded the issue to the Board for further consideration.

Despite this decision, the Board’s proposed joint-employer rulemaking remains open for public comment until January 14, 2019. The impact of this decision on the Board’s rulemaking remains to be seen, but the Court cautioned that  “[t]he policy expertise that the Board brings to bear on applying the National Labor Relations Act to joint employers is bounded by the common-law’s definition of a joint employer. The Board’s rulemaking, in other words, must color within the common-law lines identified by the judiciary.”

Please watch this space for a more extensive analysis of the Court’s decision.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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