NLRB Reverses Browning-Ferris and Re-Establishes More Limited Standard for Determining Joint Employer Status

by Hirschfeld Kraemer LLP

Hirschfeld Kraemer LLP

[author: Ian Forgie]

On December 14, 2017, the National Labor Relations Board (the “NLRB” or “Board”) decided  Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. (“Hy-Brand), reversing its 2015 decision in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery (“Browning-Ferris) and re-establishing the pre-Browning-Ferris standard for determining joint employer status.  As detailed in our blog post here, the Browning-Ferris decision overturned three decades of Board precedent limiting joint employer status to entities that actually exercised direct control over the terms and conditions of employment.  Under the Browning-Ferris standard, an entity may be a joint employer if it has the right to “share or codetermine” the terms and conditions of employment, even if it never exercised that right and even if the reserved control is indirect or “limited and routine.”

In Hy-Brand, the Board analyzed whether two construction companies were joint employers of seven discharged employees, five of whom were terminated by Hy-Brand Industrial Contractors, Inc. (“Hy-Brand”) and two of whom were terminated by Brandt Construction Co. (“Brandt”).  The employees were terminated after engaging work stoppages that the Board determined were protected concerted activity.  Before deciding whether Hy-Brand and Brandt were joint employers, however, the Board analyzed and rejected the Browning-Ferris standard.

The Board identified five “major problems” with the joint employer standard adopted in Browning-Ferris.  According to Hy-Brand, the Browning-Ferris standard exceeded the Board’s statutory authority because, instead of interpreting and applying the common law of agency, the standard reflected an “economic realities” theory and an attempt to serve a “statutory purpose;” adoption of the standard was motivated by a desire to return to a simpler bargaining environment that never actually existed; the standard exceeded the bounds of deference afforded to the Board by the courts; the standard was “ vague and ill-defined”; and adoption of the standard sought to redress imbalances in bargaining power which the National Labor Relations Act (“NLRA”) was not intended to address.  The Hy-Brand decision described the Browning-Ferris decision as “misleadingly depict[ing] the limits of common law” and accused it of having “distorted the common law agency test.”

After rejecting the Browning-Ferris standard, the Board re-established the prior standard that “a finding of joint-employer status requires proof that the alleged joint-employer entities have actually exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”  Applying this standard, the Board determined that Hy-Brand and Brandt were joint employers because they shared a Corporate Secretary, the shared Corporate Secretary was directly involved in the terminations at issue, the Corporate Secretary identified himself as a Brandt official in the termination letters sent to the Hy-Brand employees, and the two companies maintained shared employment policies and practices, all of which were overseen by the shared Corporate Secretary.

The two dissenters were equally critical of the majority’s decision.  They argued that deciding whether Hy-Brand and Brandt Construction were joint employers was unnecessary to resolving the dispute, that overturning Browning-Ferris did not affect the outcome of the dispute in Hy-Brand, that neither party asked the Board to reconsider Browning-Ferris, that the majority failed to give notice that it was considering a change in the law and failed to provide interested parties an opportunity to present briefs on the issue, and that the decision was untimely, given that the D.C. Circuit was currently considering an appeal in Browning-Ferris.

The decision represents another milestone in the Trump administration’s efforts to roll back labor policies adopted during the Obama administration.  In June of this year, as detailed in this blog here, the Department of Labor withdrew joint employer and independent contractor guidance issued in 2015 and 2016 (that guidance is available here and here).  That guidance generally favored employees, expanding joint employer status and challenging the independent contractor status of workers in the so-called “gig economy.”


The return to the pre-Browning Ferris standard is a welcome development for employers, to be sure.  The difference between actual control and potential control is a bright line that employers can strategically work with, and the NLRB’s about-face largely quiets the consternation of the past two years that a company could, for example, be found to be the joint employer of an independent contractor’s employees through a “potential control” theory (referred to by the Department of Labor during the Obama Administration as “vertical” joint employment).  Part of the fear was that a joint employer finding, on the basis of potential control, could in turn lead to companies being forced to collectively bargain with the employees of its independent contractors, and thereby immensely expand an enterprise’s potential liabilities.   The same concern of broadened liability existed for “vertical” joint employment between franchisors and the employees of its franchisees.

So the apparent death of such a “vertical” joint employment model will not be mourned.  That said, employers still need to be cognizant of the effects of potential shared control of more than one enterprise (the pre-existing standard of “horizontal” joint employment): where an employer shares facilities, key employees, has common management, or any of the other shared attributes identified in the pre-Browning Ferris standard, the likelihood of finding a joint employer relationship increases, and employers should consider consulting with their counsel to ensure that there is no material, shared function between such enterprises.  (And of course, there is still a pending appeal of the NLRB’s Browning-Ferris decision in the Court of Appeals for the District of Columbia, and that Court could end up affirming the NLRB’s former “vertical” joint employment model—which the NLRB has now abandoned.  But the currently constituted NLRB would likely go its own way and ignore any Circuit Court decision, on the NLRB’s long-stated logic that that it is only bound to adhere to the decisions of the United States Supreme Court, not that of Circuit Courts of Appeal.)

Stay tuned.  Looking ahead, the NLRB will continue to be an important forum as a shift to employer-friendly interpretations of the NLRA likely continues.

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.

© Hirschfeld Kraemer LLP | Attorney Advertising

Written by:

Hirschfeld Kraemer LLP

Hirschfeld Kraemer LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.