Wyatt Employment Law Report


With New NLRB Proposed Rule, Browning-Ferris’s Days May Be Numbered

By Thomas E. Travis

The National Labor Relations Board (“NLRB”) recently proposed a new rule to scale back a controversial Board decision from 2015 regarding the appropriate test for whether a franchisor and franchisees are “joint employers” under the National Labor Relations Act. This would directly roll back the NLRB decision in Browning-Ferris Industries of California, where the Board extended joint employment to circumstances where a company has only “indirect” control over another company’s workers, overturning a prior ruling that required “direct and immediate control.”

The new proposed rule would establish that two entities become joint employers “only if the two employers share or codetermine the employee’s essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.” This is, of course, much closer to the original “direct and immediate control” standard, with even more ascertainable guidelines to assist the Board in reaching its determination. And contra Browning-Ferris, this standard is much more difficult for challengers to meet in making claims for joint employment.

Should the proposed rule take effect, commenters are somewhat divided over the impact of Browning-Ferris on litigation. Some observers note that the standard was infrequently invoked and seemed to not impact labor litigation nearly as much as its detractors contend. On the other hand, some critics rebut that the impact is felt not just in litigation, but in business planning and economic development: the broad standard invoked in Browning-Ferris required entities to closely evaluate every workplace scenario in attempt to avoid the vague strictures of the NLRB’s decision, and the prior rule seems to disincentivize franchising and other cost-saving business relationships.

Employers will most likely welcome the proposed change. If anything, the proposed change removes the latent ambiguities from Browning-Ferris, and replaces it with a clear standard to ease future business planning going forward.


Employers Have Opportunity to Comment on NLRB’s Proposed Joint Employer Rule

By Sharon Gold

The National Labor Relations Board (“NLRB”) recently proposed a rule establishing the standard for determining joint employer status under the National Labor Relations Act.  Employers have until November 13, 2018 to comment about the proposed rule.  The proposed rule, commentary and instructions on commenting are available here.

There have been several changes to the definition over the past few years, which has caused uncertainty for employers.  The proposed rule states that employers are joint employers “only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.”  Proposed Rule Part 103.40.  “A putative joint employer must possess and Continue reading