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NLRB Under Trump Administration Overturns Browning-Ferris

As recently discussed in a previous blog post, two recent additions to the National Labor Relations Board (NLRB) - William Emanuel and Marvin Kaplan - joined Board Chairman Phil Miscimarra to form a Republican majority for the first time in a decade. The Board’s new configuration under the current administration jeopardizes recent labor-friendly Board decisions.

This warning has, unfortunately, come true. On December 14th, the NLRB in Hy-Brand Industrial Contractors overturned its decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”) in a 3-2 decision.

In Browning-Ferris, which was decided by the NLRB during the Obama Administration, the Board updated the standard used to determine whether an employer is a “joint employer” for the purpose, in part, of determining who is responsible for violations of the NLRA and who is required to come to the bargaining table. The law provides that two entities are considered a “joint employer” when 1) they are both employers within the meaning of the common law; and 2) they share or codetermine matters pertaining to the essential terms and conditions of employees’ employment. In Browning-Ferris, the Board held that in determining whether two employers share or codetermine matters pertaining to the essential terms and conditions of employment, such a finding is supported if one employer exercises indirect control over the employees of another through an intermediary. This had far-reaching implications in industries such as the fast-food industry by allowing, in appropriate circumstances, the parent corporation to be liable for NLRA violations of franchisees. It also had implications in cases where a corporation uses a staffing agency to hire contract workers that perform work for the corporation, such that the corporation could, if the facts supported such an outcome, be responsible for the labor violations of the staffing agency.

Now, under the Trump Administration, the Board has reversed its decision in Browning-Ferris, holding instead that to be a joint employer, one employer must exercise control over the essential terms and conditions of employment of the other employer, and it must do so directly and immediately, rather than indirectly. This constitutes a reversal back to the pre-Browning-Ferris standard of who constitutes a “joint-employer”.

This decision protects large corporations that use a franchise model or an outside staffing agency from liability for labor law violations, and it eliminates the obligations of these corporations to negotiate with workers’ unions. As a result, it hurts the multitudes of workers employed by these corporations. These corporations will be able to continue to exert influence over the terms and conditions of employment of these employees whilst avoiding the obligation to bargain collectively (and avoiding any liability for violations of labor law).

This drastic change by the new Republican-majority Board clearly demonstrates that practitioners, unions, employees, and others affected by changes in Board policy should be on the alert for more upcoming changes. If you have any questions as to how these changes impact you, the experienced attorneys at the Zazzali Firm stand ready to answer any questions you may have and, if necessary, help you to enforce your rights.

©2017 Zazzali, Fagella, Nowak, Kleinbaum & Friedman. Blog is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between the Zazzali Law Firm and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of the Zazzali Law Firm.

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