October 23, 2021

Volume XI, Number 296

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October 22, 2021

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October 21, 2021

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NLRB Overrules Browning-Ferris Joint-Employer Test and Reinstates the Prior Standard for Joint Employment

On December 14, 2017, the National Labor Relations Board (“NLRB”) voted 3-2 to overrule its own August 2015 decision in Browning-Ferris Industries. Browning-Ferris had overturned the long-standing test of joint employment and expanded the definition of joint employment to include entities with the ability to “indirectly control” employees or the ability to exert such control over the employees of another business. The December 14 decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co returns the joint employment standard to one of “direct and immediate control.”

Accordingly, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship. Under the revived, pre-Browning-Ferris standard, two or more entities will be deemed joint employers under the NLRA only if there is “proof that putative joint employer entities have 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 Hy-Brand decision comes after a change in the composition of the NLRB in 2017. Philip Miscimarra, who dissented in the Browning-Ferris decision, and the board’s two newest members, Bill Emanuel and Marvin Kaplan, now compose the majority, with the remaining Browning-Ferris majority, now in dissent. Miscimarra, speaking for the majority and echoing the sentiments from his Browning–Ferris dissent, held that there were five “major” problems with the Browning-Ferris decision, most significantly, that the Browning-Ferris decision exceeded the NLRB’s authority, and that definitions of employer were “solely within the province of Congress.” The majority also held that the Browning-Ferris decision was an attempt to correct a perceived inequality in bargaining leverage for workers but that inequality “was the wrong target, and expanding collective bargaining to an employer’s business partners was the wrong remedy,” noting that businesses have widely varying degrees of power when it comes to contracting with employees.

In the wake of Browning-Ferris, many employers reviewed their contracting relationships to address and improve compliance with the revised rule. Although the Hy-Brand decision returns the joint-employer test to its pre-Browning Ferris structure, employers can expect that the joint-employer issue will continue to be revisited by the Board with future changes in its composition, as well as by Congress at the Board’s invitation.

Copyright © 2021 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume VII, Number 352
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About this Author

Theresa Sprain, Womble Carlyle Law Firm, Labor and Employment Attorney
Member

Building upon her experience as a product liability litigator handling multi-party, multi-state lawsuits, Theresa is a member of the Labor and Employment Practice Group, concentrating her practice on litigation. She is particularly focused on litigation regarding gender, age, race, and disability discrimination and retaliation matters; arbitration of employment contract disputes; and counseling employers on human resources policies and employment law compliance. She represents a broad spectrum of clients, including manufacturers, hospitals, universities and service...

919-755-2104
John E. Pueschel, Womble Carlyle, employment lawyer, wage discrimination attorney
Partner

John devotes his practice to representing businesses in the ever-changing area of labor and employment law. Whether helping employers avoid litigation by guiding them through the maze of employment-related statutes and regulations, or aggressively representing them in lawsuits or arbitration, John offers advice and assistance in a wide array of employment-related issues. For example, he regularly assists businesses with discrimination and harassment claims under Title VII, the ADA, the ADEA, the FMLA and equivalent state laws, claims of wrongful termination and...

336-721-3726
Jennifer Nusbaum, Womble Dickinson Law Firm, North Carolina, Labor and Employment Litigation Attorney
Associate

Building on her experience as both a litigator and transactional attorney, Jennifer Nusbaum is a member of the Labor and Employment Practice Group and the Education and School Law Team. Jennifer’s experience with litigation, client counseling, intellectual property, and corporate drafting allows her to bring a new prospective to the table when dealing with employment matters.

She represents a broad spectrum of clients in a range of matters including gender, age, race, and disability discrimination and retaliation matters; arbitration of...

919-755-2111
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