National Labor Relations Board Vacates Joint Employer Decision Amid Controversy

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»Labor Resources

by NATSO/02-27-2018

Labor Resources

The National Labor Relations Board (NLRB) has vacated its recent ruling, known asHy-Brand Industrial Contractors,meaning a more expansive standard for “joint employment” under the National Labor Relations Act is back in effect. This is a negative development for employers, especially those in the truckstop industry. The decision comes after an NLRB Inspector General report questioning one NLRB board member’s relationship with a law firm that is involved in the case.

Since the NLRB returned to the joint employer standard standard established during the Obama Administration, employers may again be named joint employers under the National Labor Relations Act if they have :

“directly” exercised control over terms and conditions of employment,
“indirectly” exercised control over terms and conditions of employment through an intermediary, or
the “reserved” authority to control terms and conditions of employment.

At the end of 2017, the NLRB sought to take advantage of a Republican majority and pass a number of decisions before former board member Philip Miscimarra ended his term. The recently vacatedjoint employercase was one of them. That case,Hy-Brand, reversed the controversialBrowning-Ferrisdecision handed down during the Obama Administration that dramatically expanded the definition of “joint employment” under federal law.

The decision injects even more uncertainty and instability into an already confusing area of labor law. It also underscores the necessity for the Senate to act on the bipartisan joint employer billpassed by the House(“H.R. 3441”) last November. NATSO has been anactive memberin a coalition that has advocated for joint employer legislation in Congress.

The business community has grappled with uncertainty about the definition of joint employer since 2015, when the NLRB ruled in a decision known as “Browning Ferris” that by merely exercising indirect control or possessing unexercised potential control over work conditions one could be a joint employer.

This decision dramatically changed when a company may be held liable for labor violations by other employers they contracted with. Under that ruling, a company deemed a joint employer also would assume bargaining responsibilities if the other employer was unionized, which the International Franchise Association (IFA) has argued could crush the franchisee-franchisor relationship. Previously, a company only established a joint employer relationship when they directly controlled the essential terms and conditions of employment of another company with which they contracted.

Since 2015, businesses have been confused because of the unpredictable joint employer liability yet have faced higher operational and legal costs, decreased business values, less compliance assistance, less growth and fewer opportunities to create jobs.

These issues are of specific concern to the truckstop and travel plaza industry, where the franchisor-franchisee relationships are ubiquitous. Furthermore, NATSO members work with a variety of contract workers such as equipment inspectors and fuel delivery personnel. The nature of this work is such that NATSO members may provide detailed instructions as to how equipment must be inspected to ensure that there are no substance leaks, or when fuel must be delivered to minimize disruptions and potential dangers. An expanded joint employer standard therefore could penalize truckstop owners by viewing these work requirements as indicative of a joint employer relationship.

NATSO has created amembers-only toolkit analyzing the joint employer issue as well as the evolving nature of employment under federal labor law.

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National Labor Relations Board Vacates Joint Employer Decision Amid Controversy - NATSO (2024)

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