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Browning-Ferris Joint Employer Standard Reinstated, For Now

Labor & Employment Alert Judith A. Williams-Killackey, Christopher L. Nickels

On February 26, 2018, the National Labor Relations Board (NLRB or the Board) unanimously vacated  Hy-Brand Industrial Contractors, et al., 365 NLRB No. 156 (December 14, 2017). In Hy-Brand, the Board overruled the employee-friendly joint employer test set forth in Browning-Ferris Industries of California Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (August 27, 2015) and reinstated, at least temporarily, a more employer friendly version of that test. Read more about the Hy-Brand decision here.

Following the issuance of the Hy-Brand decision, a motion for reconsideration was filed, asking in particular that Board Member William Emanuel be recused from participating in the decision. Last week the Board's inspector general issued a report faulting Member Emanuel for having participated in the Hy-Brand decision because his former law firm had been involved in the Browning-Ferris matter. The inspector general concluded that Member Emanuel should have recused himself from participating in Board deliberations regarding the joint employment standard as a result of his firm's prior involvement.

As a result of Hy-Brand's being vacated by the Board, the standard for joint employment under the National Labor Relations Act (NLRA) announced in Browning-Ferris is once again controlling. Under the Browning-Ferris test, two or more entities are joint employers of the same employees for labor relations purposes “if they share or co-determine those matters governing the essential terms and conditions of employment,” based on an employer’s right of control, which could include indirect control, regardless of the exercise of actual control.

Despite Hy-Brand being vacated, it appears likely that we will continue to see developments to the NLRA joint employer standard. Notably, the Browning-Ferris case itself is still pending. Prior to the Hy-Brand decision, Browning-Ferris was before the United States Court of Appeals for the District of Columbia. That court, however, remanded the case to the Board for reconsideration in light of (the now vacated) Hy-Brand decision. Thus, we expect that the Board will reconsider the joint-employer test in either the Browning Ferris case itself or another case. In addition, Congress has been considering legislation to amend the NLRA to establish a direct control standard for joint employer liability.  Quarles & Brady will continue to report on this issue.