Wyatt Employment Law Report


NLRB Returns to Traditional Common-Law Test For Independent Contractors

By Michelle D. Wyrick

On January 25, 2019, in SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338, Case 16–RC–010963, the National Labor Relations Board (“NLRB”) overruled its prior decision in FedEx Home Delivery, 361 NLRB 610 (2014), and returned to the common-law test that it previously used to determine whether workers were employees or independent contractors.  The NLRB’s decision clarifies the role that “entrepreneurial opportunity” plays in deciding whether workers are employees or independent contractors.  The significance is that employees can unionize under the National Labor Relations Act (“NLRA”).  Independent contractors cannot.

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The NLRB criticized the FedEx decision because it “significantly limited the importance of entrepreneurial opportunity.”  In SuperShuttle, the NLRB considered whether franchisees who operated shared-ride vans for SuperShuttle Dallas-Fort Worth were employees covered under the NLRA or independent contractors.  The franchisees were required to purchase or lease their own vans (that met franchise specifications), and they paid SuperShuttle Dallas-Fort Worth a franchise fee and a flat weekly fee for the right to use the SuperShuttle brand and its reservation apparatus.  Franchisees paid for their own gas and van maintenance.  The franchisees were not Continue reading


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