A Glimpse into the Future of Joint Employer Status for US Companies, and it’s Scary

After years of outsourcing technical services jobs, CNN ended its contract with the supplying temp agency Team Video Services (TVS) and took those jobs in-house in 2003. The contract between CNN and TVS stated that TVS employees “are not employees of CNN and shall not be so treated at any time by either TVS or CNN.” TVS had “sole and absolute discretion and responsibility for hiring, firing, wages, benefits, compensation, direction of the work force and other matters of personnel and labor relations” regarding all technical personnel.

In September 2014, the National Labor Relations Board ruled – after sitting on the case for 10 years – that CNN was a joint employer with TVS and wrongfully terminated its contract with the temp agency because they did not negotiate with TVS’ unionized technicians before making the decision. This, despite conceding that CNN had no direct role in hiring, firing, disciplining, discharging, promoting, or evaluating employees and that CNN did not actively co-determine TVS technicians’ other terms and conditions of employment.

The Board claims that CNN terminated the contract out of “anti-union animus” and that CNN had a hand in determining working conditions for the technicians because they required them to work 40 hours a week, required part-time employees be available 24/7, and advised TVS on market-rate salaries to pay the employees. According to the Board, this level of involvement is enough to classify CNN and TVS as joint employers under the current (traditional Laerco) test for joint employment status. I can only imagine the lengths the Board will go to once it starts following the more lenient standards proposed by the General Counsel.

CNN is appealing this decision, as expected, to the D.C. Circuit Court, and some expect the D.C. Circuit to overrule the Board’s decision. Nonetheless, if the Board really is redefining the test for joint employer status to be indirect or potential control of working conditions, similar contracts throughout the United States are in peril. User companies will become joint employers with the temp agencies they use, and franchisors will become joint employers with their franchisees.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.