Browning Ferris: The Short-Lived Tasmanian Devil has Died

The National Labor Relations Board (NLRB) overruled Browning-Ferris Industries and returned to the pre-BFI standard that governed joint employer liability.

The BFI decision set forth a broad definition of “joint employer” imposing liability and requiring bargaining in situations where a business posses only potential and indirect control over the employees in question. The BFI test was unpredictable and fundamentally altered the law applicable to a number of business relationships including: user-supplier, contractor-subcontractor, franchisor-franchisee, parent-subsidiary, predecessor-successor, lessor-lessee, and creditor-debtor.

Under BFI, a company could be deemed a joint employer of another company’s employees even if the company had never exerted overt control over workers’ terms and conditions of employment. This law wreaked havoc on the modern way businesses are run. Much like the Tasmanian devil in Looney Tunes cartoons, BFI spun onto the scene, stirred up trouble, and has now quickly went away.

The Hy-Brand Board wrote: “the BFI standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.”

Hy-Brand announced the Board was returning to the principles governing joint employer status that existed prior to BFI and applying this standard prospectively to all pending and future cases.

Thus, under the new Hy-Brand standard, “a joint-employer finding shall once again require proof that the putative joint employer entities have actually exercised joint control over essential employment terms,” like the right to hire, terminate, discipline, supervise, and direct those employees.

This is welcome news for the business community because gone are the days when “reserved authority” to control will automatically render two entities joint employers of one another’s employees. Rather, an employer may be considered a joint employer in relation to the other employer’s employees only if such employer “directly and immediately” and not in a “limited and routine” manner – exercises significant control over the essential terms and conditions of employment.

With the reversal of BFI, a variety of employers may still be at risk of joint employment finding under the NLRA, including but not limited to some of the relationships described above (e.g. user-supplier, contractor-subcontractor, franchisor-franchisee). Therefore, employers wishing to avoid a joint employer finding should assess these and other corporate/employment relationships under Hy-Brand and the pre-BFI cases and develop a labor policy consistent with these principles.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Trump’s NLRB GC will Protect Right to Refrain from Joining Unions

Peter Robb, President Trump’s pick as the next general counsel for the National Labor Relations Board, told a Senate panel that he would uphold the “core values” of federal labor law. He said that would include the right to “refrain” from union activity.

Robb’s statement indicates he would make it a priority for the Board to ensure the rights of employees who dissent from their union’s positions and that he would set a higher bar for unions to prove that they have majority support of workers before certifying an election. His position would be a sharp turn from general counsel Richard Griffin who strove to make union organizing easier.

Robb has practiced labor law at my go-to Vermont firm Downs Rachlin Martin since 1995. Prior to that, he served as chief counsel to NLRB member Robert Hunter.

In November 2013, Griffin was appointed as the board’s general counsel with five board members as part of a deal between Senate Republicans and the Obama administration. Griffin helped push the Board in a decidedly pro-union direction by re-evaluating exiting rules and procedures like the joint employer doctrine, which made companies potentially liable in any case where they had “indirect control” over another company’s workforce.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

NLRB Enforces Subpoena about Alleged Joint Employer Relationship with Nothing More than Mere Allegation of Joint Employer Status.

The National Labor Relations Board has denied petitions to revoke subpoenas that were issued by an NLRB Regional Director to two companies seeking information about a possible joint employer relationship between the two employers. You read that right. The two pro-labor NLRB Board Members enforced the subpoenas despite the union’s failure to articulate any facts about the joint employer allegation.

This is remarkable. The charge referred to the employers as alter egos, single employer, and joint employers, but the unfair labor practice charge did not have any additional information. Per the NLRB, the subpoenas “lie well within the scope of the Board’s broad investigative authority, which extends not only to the substantive allegations of the charge, but to ‘any matter under investigation or in question’ in the proceeding.” The NLRB continued, “nothing in Section 11 of the Act or Sec. 102.31(b) of the Board’s Rules can be read to impose a requirement that the Regional Director articulate ‘an objective factual basis’ in order to compel the production of information that is necessary to investigate a pending unfair labor practice charge.”

Once again, employers are on the losing end of the current NLRB pro-union majority Thankfully acting-chair Miscimarra sticks up for employer’s rights (albeit in dissenting opinions only). Member Miscimarra wrote that a subpoena seeking documents pertaining to an alleged joint-employer or single-employer status of a charged party “requires more…than merely stating the name of possible single or joint employers on the face of the charge.” Specifically, the General Counsel must be able to articulate “an objective factual basis supporting such an inquiry.” Member Miscimarra found the General Counsel failed to do so here.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Unions Continue to Convince Themselves They’re Better Off Long Term with Trump in the White House

Maybe a profoundly anti-worker Trump administration is just what American labor needs – a galvanizing force, and a defined target – is the thought process coming from many in the labor movement today. They then start to list the many areas of labor law that changed under President Obama and that are ripe for changing back to what they were pre-Obama. For example:

  • The make up of the NLRB. The term of the sole Republican Obama-appointed Philip Miscimarra expires in late 2017, as does that of general counsel Richard F. Griffin, Jr. That means President Trump will be in a position to radically reshape the NLRB with three board appointees and a new general counsel in his first year.
  • Quickie Elections. This change sped up the calendar for union-recognition campaigns and reduced companies’ ability to fight of the effort. A major win for unions.
  • Joint Employer. The NLRB made great strides in making franchisors share responsibility for the treatment of workers by franchisees. The same is true for the staffing industry where user and supplier companies are now more easily defined as joint employers.
  • Right to Work. Slightly more than half of the states in the U.S. have Right to Work laws allowing employees to decide if they want to be in a union and pay union dues. If a state is not Right to Work, then all employees working in a classification covered by the collective bargaining agreement must be in the union to work at that company. There is a movement at the federal level for a national Right to Work law which could get enough support within Congress and the Trump administration to pass.

So, says the labor movement, maybe a profoundly anti-worker Trump administration is just what American labor needs – a galvanizing force, and a defined target. And by expanding and building on the successful fights for higher minimum wages, labor can remind workers that the more they fight together, the more they gain together. Maybe. Or maybe unionization rates will continue to plummet year after year after year….

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Campaigning to Congress to Reverse NLRB Joint Employer Ruling Started

More than 50 businesses and trade groups are asking Congress to pass legislation to repeal the National Labor Board’s new joint employer standard. As a reminder, in August 2015, the NLRB ruled that “indirect” and “potential” control over workers’ terms and conditions makes a company a joint employer. This rule change exposed a broad range of businesses – from contractors and subcontractors, to franchisors and franchisees – to workplace liability for another employer’s actions and for workers they do not employ.

The NLRB will not be reversing the ruling anytime soon on its own. “The president can nominate two new board members, but those nominees will require Senate approval, which takes time,” the groups wrote in their letter. “After new members are confirmed to the Board, it will take more time for an appropriate case to develop so the Board can restore the ‘direct control’ joint employer standard.” Even then, they said, the decisions could be overturned by future administrations.

Here is a link to the letter so you can see if your trade association has supported this movement. If not, you may want to consider requesting it do so.

Matt Austin who owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

The Anticipated Trump Effect on Labor Law in the Staffing Industry

In 2016 the National Labor Relations Board maintained its generally pro-union, anti-employer stance in ways that affect both unionized and non-unionized employers. The Board currently has two openings, which, once President Trump fills, will result in a pro-business NLRB. However, due to the Board’s rules, employers might not see immediate improvement. After all it wasn’t until years 7 and 8 of Obama’s presidency that major pro-union initiatives were implemented. Therefore, employers in 2017 (and likely beyond) will be forced to deal with the extreme pro-union rulings from 2015 and 2016. But once the pro-business Board can start unraveling current anti-business rulings, here is what I expect will result in the staffing industry.

Miller & Anderson amplified 2015’s Browning Ferris ruling, expanding the ability of “joint employees,” such as those provided to a user-employer by a staffing company, to organize. Now, solely and jointly employed employees can band together in the same unit without consent from either the user-employer or the provider-employer, if the “community of interest” standard is met. In a combined unit, the user-employer is required to bargain over all terms and conditions of employment for all employees it solely employs and for jointly employed employees that it possesses the power to control.

Because of this decision, I expect a lot of organizing to occur in the staffing industry. Staffing companies should step up their employee satisfaction and union avoidance programs right now. User-employers must evaluate both their own and their staffing companies’ vulnerability to union organizing. All employers, of course, should be looking at scenarios, including worst-case scenarios, in the event of organizing, and create plans for combating an organizing drive.

Matt Austin who owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

NLRB Finds Joint Employer Relationship Partly Because Companies had Worked Together Before thus They will do so Again

Retro Environmental Inc., a construction company, was a joint employer with staffing agency Green JobWorks, LLC regarding a group of full- and part-time laborers. The NLRB found that the construction company primarily controlled the day-to-day work of the temporary workers, while the temporary staffing agency handled matters such as hiring and assigning employees to job sites, completing pre-employment drug screens, and conducting background checks. Green JobWorks also controlled the rate of pay and payroll procedures for the temporary workers, as well as discipline and termination, although Retro could request a replacement when unsatisfied with a particular worker’s performance.

During the summer of 2015, the staffing agency provided workers to the construction company for two demolition and asbestos abatement projects scheduled to conclude in July. In June 2015 the NLRB’s Regional Director dismissed the petition because the projects were close to being completed and there was not enough evidence to suggest the companies would continue working together. In a 2-1 decision reversing the Regional Director in part because the staffing agency had supplied workers to the construction company on several projects before, so it was foreseeable that it would do so again. So according to the NLRB, just because a company contracts with another before means that it will do so again and thus those separate companies are joint employers?

Both staffing agency employers and employers who contract with staffing agencies should be mindful of ongoing attempts by unions to organize a single group of workers in this context, and they should contact qualified counsel regarding strategies for handling possible joint employment scenarios, including the drafting and implementation of service agreements and the areas of control that an entity may ant to exclusively maintain or forego.

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.