September 23, 2019

September 23, 2019

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September 20, 2019

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NLRB Rolls Back "Browning-Ferris" Joint Employer Test

The National Labor Relations Board (NLRB) yesterday overruled Browning-Ferris Industries of California, Inc., an Obama-era decision that expanded the doctrine of joint employment under the National Labor Relations Act (NLRA). In Hy-Brand Industrial Contractors, Ltd., and Brandt Construction, Co., the Board rolled back the expansion of joint employer liability and returned to the long-standing direct control standard for determining joint employer status. A return to this standard means that employers that exercised no "direct and immediate control" over employees' essential employment terms and conditions will not be liable as a joint employer for labor law violations committed by a partner employer.

In Hy-Brand, the NLRB affirmed an administrative law judge's finding that Hy-Brand and Brandt Construction were joint employers and jointly liable for unfair labor practices, but rejected that court's application of the Browning-Ferris standard in finding joint-employer status. Browning-Ferris reversed long-standing precedent and held that an entity could be considered a joint employer even if it never actually exercised any control over the employee.

Under Browning-Ferris, mere authority to exercise indirect control was sufficient to result in a joint employer relationship. Browning-Ferris was a significant departure from prior NLRB precedent that required direct and immediate control to find a joint-employer relationship. The Board's decision in Hy-Brand is consistent with Board Chairman Philip Miscimarra's dissent in Browning-Ferris.

Hy-Brand articulates five primary reasons for overruling Browning-Ferris, noting that it:

  • exceeded statutory authority by expanding the coverage of the NLRA;

  • overreached by changing the Congressionally limited definition of "employer";

  • modified the agency standard in a way that only Congress may;

  • caused confusion and instability in labor relations by abandoning long-standing precedent; and

  • was an incorrect remedy to an incorrectly identified issue regarding bargaining inequality.

Under Hy-Brand, "a finding of joint-employer status shall once again require 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 does administratively what Congress intended to do legislatively with the Save Local Business Act, H.R. 3441. If Congress passes H.R. 3441, it will codify the Hy-Brand decision. Passage of the Save Local Business Act would prevent any future Board-initiated policy change that might result from a future change in Board composition. See our November 13, 2017, alert for more information on this pending legislation.

Copyright © by Ballard Spahr LLP

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Daniel Johns, Ballard Spahr Law Firm, Philadelphia, Labor and Employment Attorney
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Daniel V. Johns is the Leader of Ballard Spahr's Higher Education Group and is a member of the firm's Labor and Employment Group. Mr. Johns represents and advises employers and management in a variety of labor and employment issues, including discrimination, harassment, and other civil rights litigation; interest and grievance arbitrations; at-will litigation; restrictive covenant/trade secret claims; benefits litigation; independent contractor classification issues; collective bargaining; union avoidance; and unfair labor practice litigation before the National Labor...

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Sade Calin, Ballard Spahr Law Firm, New Jersey, Litigation Attorney
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Sadé Calin is a member of the Litigation Department. Her experience includes the handling of labor and employment disputes, including discrimination cases, and serving as a court-trained mediator in landlord-tenant and municipal cases in Camden County, New Jersey. Before joining the firm full time, Ms. Calin was a summer associate at Ballard Spahr. She assisted with a variety of research projects, helped author chapters focused on at-will employment and attorney's fees in discrimination cases for the Employment Litigation in New Jersey treatise, and played a significant role in the firm's work on the Pennsylvania Innocence Project. Ms. Calin also gained experience working on projects involving commercial litigation and environmental litigation.

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Mary Cate Gordon, Ballard Spahr Law Firm, New Jersey, Labor and Employment Litigation Attorney
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Mary Cate Gordon represents employers in all aspects of labor and employment law. Her employment litigation experience includes defending wage and hour, harassment, discrimination, retaliation, breach of contract, unfair competition, and wrongful termination claims. Ms. Gordon counsels employers on workplace issues such as hiring and discharge matters, reductions in force, wage and hour compliance, drug testing, and disability accommodations. She has experience assisting employers with drafting and reviewing workplace policies and agreements, including social media...

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