NLRB Update: 2015 Joint Employer Standard Revised
In what is seen as a victory for employers, the National Labor Relations Board (the “Board”) issued a 3-2 decision in HyBrand Industrial Contractors, Ltd. and Brandt Construction Co. (“HyBrand”) striking down the joint employer standard stated in Browning Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery (“Browning-Ferris”), and returning to the pre-2015 standard for joint employers.
Before Browning-Ferris, the Board focused on whether the putative joint employer’s control over employment matters (i.e., hiring, firing, discipline, supervision, and direction) is “direct and immediate,” not only looking at contractual provisions related to these topics, but also the actual practice of the parties related to these topics. In other words, the potential or reserved authority of a putative joint employer was less important. In the 2015 Browning-Ferris decision, the Board expanded the scope of a joint employer and diverted from this prior standard, holding that two entities, regardless of whether they ever exercised joint control over essential terms and conditions of employment, will be deemed joint employers based on potential, “reserved” joint control, indirect control, or control that is “limited and routine.”
The Board in HyBrand reverted to the prior joint employer standard because it believed the Browning-Ferris decision departed from the common law definitions of “employee” and “employer” interpreted by the Board and the courts, was not in line with the National Labor Relations Act, was not great policy, and did not foster stability in labor-management relations. This is just one of the recent indicators that the conservative majority of the Board will issue more employer-friendly decisions.