D.C. Circuit Weighing Joint Employer Case

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The United States Court of Appeals for the District of Columbia Circuit is considering the case of Browning-Ferris, the seminal decision in which the National Labor Relations Board (NLRB) revised its standard for determining joint employer status.  The court heard oral arguments in the case last month, and observers of labor policy eagerly await a decision.

As this blog noted at the time, Browning-Ferris was one of the most highly anticipated decisions of the Obama-era NLRB because the Board was widely expected to use it as a vehicle for radically altering its joint employer standard.  For 30 years prior to it, the NLRB considered two different businesses to be joint employers if both entities exercised direct and immediate control over the terms and conditions of employment of the same workers.  In other words, both entities had to actually share the ability to hire, fire, discipline, supervise and direct the workers in question in order to be considered joint employers.

The test in Browning-Ferris tossed aside that clear and well-established standard in favor of one in which almost any economic or contractual relationship could trigger a finding of joint employer status.  Rather than the direct and immediate control standard, Browning-Ferris adopted a much more amorphous one that relies on “indirect” control or the “potential” to control the terms and conditions of employment of another business’s workers. 

On the heels of Browning-Ferris, the Board applied its new standard in a number of cases, broadening the situations in which a joint employment relationship might exist.  These included subcontracting arrangements that were used on a sporadic, temporary basis, and allowing the formation of bargaining units composed of employees of a lead firm and the employees of a contractor without the need for consent from both employers. 

At its hearing last month, the D.C. Circuit heard arguments from both sides with great interest. For its part, Browning-Ferris urged the court to reject the NLRB’s expansive definition, while lawyers for the Board argued that the agency’s interpretation of the law was permissible.  The judges were interested enough in the issues involved that they allowed the oral argument to go on for over an hour, rather than the 30 minutes that had been allotted. 

When it issues its decision, the court may throw out the new definition of joint employer, allow it to stand as one “permissible” interpretation of the NLRA, or find it to be the only permissible interpretation of the NLRA. 

If the court finds that the NLRB’s interpretation is compelled by the statute, Congress likely would need to pass legislation to restore the Board’s previous joint employer standard, something that is already being considered anyway.  Should the court adopt one of the first two scenarios, however, the NLRB could scrap the expanded definition of joint employment and overturn Browning-Ferris.  However, that would require a majority on the Board that is willing to do so, which yet again highlights the importance of installing two new members as soon as possible.