Legal Newsline

Sunday, October 13, 2019

NLRB reversal on joint employer issue should please business community

By Angela Underwood | Jan 18, 2018

WASHINGTON (Legal Newsline) – Well-versed in federal and state labor law matters, award-winning attorney James Nicholas has much to say about two recent National Labor Board Relations (NLRB) verdict reversals.

The Foley & Lardner LLP partner discussed in detail with Legal Newsline the NLRB verdict reversal from the Obama-era 2015 Browning-Ferris Industries case and a recent reversal of that in a case involving Hy-Brand Industrial Contractors.

The two cases concerned two isolated legal entities being joint employers, beginning his explanation with the circumstance in which two companies can be deemed dual employers. Browning-Ferris adopted a more expansive definition of "joint employer," Nicholas wrote.

“It depends on the law that governs,” Nicholas said. “For purposes of the NLRB Act, Hy-Brand holds that two entities can be considered ‘joint employers’ if they both exercise ‘direct and immediate control’ over the terms and conditions of employment for a group of employees.”

Furthermore, "the terms and condition of employment would include, among other things, hiring and firing authority, control over wages and benefits and workplace policies," according to the Boston-based attorney.

“There are additional joint employer tests that courts will use – depending on jurisdiction – in cases outside of the NLRA,” Nicholas said.

The NLRB wrote that Browning-Ferris was ill-advised as a matter of policy and created instability in labor-management relations. 

“Thus, 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,'" the NLRB wrote.

The Browning-Ferris reversal was welcomed by many, according to the lawyer, who said uncertainty is now "alleviated."

“I think, on the whole, the business community didn’t like Browning-Ferris because it was inconsistent with decades of precedent and created significant uncertainty with respect to when they could be considered 'joint employers,'” Nicholas said.

He said before the reversal, employers "were caught in a situation where they may have never exercised or intended to exercise control over the essential terms and conditions of employment" for a subcontractors’, affiliates’ or a staffing company’s employees, but "were still at risk of being named a joint employer."

Now that the tide has turned, Nicholas said the new NLRB development is certain to cheer up commerce.

“Businesses have to be enthused with not only this decision, but also the other recent decisions issued by the current NLRB, including the Boeing decision issued on the same day (as) Hy-Brand, which struck down the Lutheran Heritage decision that was decided by President Obama’s board,” Nicholas said. 

“Without question, the NLRB as currently constituted has shown itself to be far more employer-friendly than its predecessor,” Nicholas added.

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