ECBM's Blog: Information To Protect What You Grow

 The next step in the long running saga over the Browning Ferris rule has finally arrived. After the National Labor Relations Board issued its decision in Browning-Ferris in 2015, a wave of lawsuits, regulatory challenges, and attempted legislative overrides put the future of that decision into doubt. An overturning of the rule became a key focus of the new administration in charge at the National Labor Relations Board. The board even issued a decision that purported to overturn the rule only to have that decision retracted due to an ethics issue. Now, on September 13, 2018, the Board has issued a new proposed regulation that seek to overturn the Browning-Ferris decision.

Issues of joint employment responsibility continue to make headlines across the United States.  Controversy has reigned ever since the National Labor Relations Board issued its decision in Browning-Ferris which changed the standards for establishing when a joint employment relationship exists.  The Board has overturned its Browning-Ferris decision in the intervening years, only to have the case overturning Browning-Ferris itself get overturned due to ethical issues.  States have moved forward with enforcing stricter joint employer liability standards even in the absence of federal action.  Businesses have had to try and re-define their employment relationships in a world of considerable uncertainty.

Ever since August 27, 2015, employers that use staffing agencies, employ subcontractors or have franchisees have faced significant uncertainty over the extent to which they constitute employers according to the United States Department of Labor. On that day, the National Labor Relations Board issued its decision in Browning-Ferris Industries of California. The Browning-Ferris decision overturned recent precedent regarding when two or more entities would qualify as joint employers.

The National Labor Relations Board revised its definition of a joint employer in 2015, leading to a host of concerns from various businesses fearing expanding liability. The decision, commonly known as Browning-Ferris, survived multiple appeals and concerted lobbying of Congress. In the wake of the 2016 election, the revised joint employer rule seemed doomed, as the new administration seemed certain to revert to the old rule, considered friendlier to business owners.

In September of 2017, Republicans gained a majority of seats on the National Labor Relations Board. After several months spent relatively quietly, the National Labor Relations Board overturned or reversed a host of decisions and regulations in the first few weeks of December. All the reversals focused on Obama-era policies only in place for a few years.

A series of decisions from the National Labor Relations Board in the past few years relating to determining who qualified as a joint employer had worried many companies across the country. Most notably, in a case involving Browning-Ferris Industries, the Board had promulgated a new test for defining the joint employer relationship that had the potential to increase significantly the liability of companies that contracted out labor or staffing to third party companies.  Businesses protested the change while labor groups celebrated.

August 2016, the National Labor Relations Board issued its decision in the Browning-Ferris case. That decision significantly revised the National Labor Relations Board test for determining who constituted an employer in joint employment situations. The NLRB returned to an older test that looked at both direct and indirect test control over the terms of employment instead of just direct and immediate control.

New regulations from the Department of Labor are expected to significantly increase the number of lawsuits arising from wage and hour claims. 

Continuing a trend from the National Labor Relations Board and several state courts, the US Labor Department issued new guidance regarding joint employer liability on Wednesday, January 20, 2016.  Companies face a number of exposures as it relates to the status of employees: these can range from unionization regulations as controlled by the NLRB, to minimum wage and overtime laws controlled by the US Department of Labor under the Fair Labor Standards Act, and even including discrimination claims under the Civil Rights Act often litigated in court.  Rules for who constitutes an employee can differ significantly depending on the employee rights sought.  The US Labor Department often uses a more expansive definition of employee than the National Labor Relations Board or the Occupational Safety and Health Administration, for example.
Read More About The Growing Liability Of Joint Employment Here

Recently, labor advocates have won a many key victories in the field of joint employer liability.  Under the old rules and laws, employers could shield themselves from liability on some key issues by using placement firms to hire and manage temporary workers. Issues such as discrimination, taxation, and fair labor standards were left to these agencies while the company could focus instead on core competencies.