On April 1, 2019, the Department of Labor proposed a new regulation, and it wasn’t an April Fool’s joke. The new regulation would seek to update the Department’s sixty year old test for determining joint employer relationships under the Fair Labor Standards Act. It is worth noting that this is different from the long running dispute over the joint employer test decided by the National Labor Relations Board as a part of its 2013 Browning-Ferris decision. This new rule would apply to allegations that employers had failed to pay their workers legally obligated wages under the Fair Labor Standards Act. Joint employers would be jointly and severely liable for any ordered back pay.
The #MeToo movement is proving how social media affects the workplace, in this case the culture. While some commentary is concerned with the validity of claims or support of victims, there is no question that it has significantly increased the pressure on employers to prevent sexual harassment in the workplace. Many employers have responded by increasing workplace training and updating their employment policies.
Developments over the last few years in federal labor law have generated a lot of discussion and analysis. Regulations and decisions affecting joint employer liability and the definition of employees at the federal level obviously draw the attention of employers. Its easy to overlook though that each state is often free to establish their own standards and tests for determining these questions; those standards may sometimes conflict with federal law.
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.