D.C. Circuit Questions Validity of the NLRB’s Joint Employer Standard

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In 2015, we discussed the new joint-employer standard that was articulated by the National Labor Relations Board in Browning-Ferris Industries of California, Inc.  As a reminder, the NLRB held that a joint-employer relationship may be found if two or more entities “are both employers within the meaning of common law, and if they share or co-determine those matters governing the essential terms and conditions of employment,” such as wages, hours, work assignments, and control over the number of workers and scheduling.  The Board further found that a joint employer is not required to exercise its authority to control terms and conditions of employment, and recognized that control may be “reserved, direct and indirect.”

The effect of this new, employee-friendly standard was a broadening of the Board’s criteria used to consider whether a joint-employer relationship exists.  In other words, it became much more likely that companies that use contract or contingent labor could face liability as the joint employer of those workers.  The story doesn’t end there, however.

The Browning-Ferris decision was appealed, and the appeal is currently pending before the United States Court of Appeals for the D.C. Circuit.  If the court’s remarks during oral arguments that were recently held are any indication of the fate of the new joint employer standard, employers have reason for cautious optimism.

The D.C. Circuit’s panel of judges described the Board’s new test as “unworkable,” with one jurist remarking that the NLRB had “dropped the ball” in its 2015 decision.  She openly questioned whether the Board was capable of policing the line between genuine joint employment and contractor relationships.  Other members of the panel criticized the new test as “unclear.”

While there is no guarantee that the D.C. Circuit will overturn the NLRB’s decision in Browning-Ferris, early signs certainly seem to indicate that such an outcome is quite possible.  We will continue to monitor the status of this case and will report any further developments right here on our blog.  In the meantime, the NLRB’s decision still stands and employers should continue to operate accordingly.

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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