Why Worry About the NLRB’s Browning-Ferris Decision?

ThinkstockPhotos-484563651About a month ago, the National Labor Relations Board, which sets rules for union organizing and other labor relations matters, revised its long-established test for the joint employment of workers.

Joint employment in labor law

The legal maneuvering in labor conflicts starts with a determination of who is on each side — labor and management. Multiple unions may compete for recognition, and more than one organization may play an employer-like role with respect to the workers. Local NLRB officials adjudicate these issues and supervise union representation elections. If the local NLRB officials find two or more firms to be joint employers of a workforce, all joint employers must participate on the management side of organizing efforts, collective bargaining, and other aspects of labor relations.

The Browning-Ferris case

In Browning-Ferris, the Teamsters tried to unionize staffing firm employees working on assignment to Browning-Ferris, and the issue was whether Browning-Ferris is a joint employer of the staffing firm’s employees. The local NLRB office ruled that there was no joint employment, but the union appealed that ruling to the national Board. In a 20-page, 3-2 majority opinion, the Board announced its new joint employment test for general application and applied the new test by ruling that Browning-Ferris is a joint employer of the workers supplied by its staffing firm.

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How the test changed

The old test focused on the direct and actual control that a putative employer (like a staffing customer) exerted on the employment of another employer’s workers. The new test imposes joint employer status even when a customer’s control is indirect or even just potential but unexercised.

The unusual Browning-Ferris facts

Many commentaries explain and criticize the changes in the joint employer test. However, for staffing firms and their customers, the case’s facts are much more troubling than its general description of the new test.

The staffing firm in Browning-Ferris functions very independently, almost like an on-site contractor or outsourcing firm. For example, the staffing firm:
• provides line lead workers and shift supervisors, who create work schedules, oversee production lines, and coach the line leads
• decides who works on particular shifts
• decides who works overtime
• sends its CEO on regular worksite visits to monitor quality and address problems
• provides an on-site HR manager and a separate trailer for that function
• excludes Browning-Ferris from the staffing firm’s hiring process
• provides supervisors to coordinate each day’s operating plan with Browning-Ferris supervisors
• provides supervisors to assign employees to particular tasks
• provides supervisors to manage operational problems and complaints by assigned workers
• provides supervisors to orient and train the assigned workers
• presents initial safety orientations to new workers

Significance for staffing relationships

If Browning-Ferris is a joint employer of its staffing firm’s employees, even when the facts show that the staffing firm is an unusually separate and independent employer, then, a fortiori (an obscure Latin phrase meaning “by even more compelling logic”), virtually all customers in typical contract staffing arrangements would be joint employers of their assigned workers for labor law purposes.

In the past, unions have generally avoided organizing contingent workers, but their new ability to “get at” the customers could change that. However, even if union organizing of contingent workers does not increase, customers may still be anxious about the potential exposure and may demand that staffing firms adopt costly operational responsibilities, indemnify customers for labor law costs arising from assigned employees, and train their personnel on forbidden unlawful labor practices.

Other consequences

The NLRB majority plans to allow assigned workers and a customer’s direct employees to be combined in a single union bargaining unit, even when the customer and staffing firm object, whenever there is joint employment and a “community of interest” between the workforces. Browning-Ferris would make joint employment a given and also make it harder to disprove a community of interest, so combined bargaining units would be more likely.

Browning-Ferris may also inspire courts and agencies to expand joint employment in other legal areas — like equal employment opportunity, employee benefits, and wage/hour law. Footnote 118 denies that the decision affects any other laws, but that is like “protesting too much” or telling us not to think about elephants.

MORE: The key to staffing firm success

George M. Reardon

George M. Reardon
George M. Reardon is an attorney whose practice is focused on the staffing industry. He can be reached at georgemreardon (at) aol (dot) com.

George M. Reardon

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