NLRB’S Joint Employer Ruling Appealed
Browning-Ferris Industries has appealed the National Labor Relations Board (NLRB)’s August 27 ruling (known as the BFI case) to the U.S. Court of Appeals for the D.C. Circuit. In BFI, the Board greatly expanded the decades old “joint employer” standard under the National Labor Relations Act (NLRA). This new standard creates additional liabilities for private-sector employers, including colleges and universities, entering into contracts for services. Particularly troubling for higher education institutions are new liabilities stemming from contracts with vendors providing services on campus, such as contracts for construction, maintenance, food service, lawn care, janitorial and security services.
Under the joint employer doctrine, one employer may be found liable for another employer’s unfair labor practices and/or violations of collective bargaining agreements. Under the prior standard, two separate entities were only considered “joint employers” over a group of employees when they both exercised “direct and immediate” control over “the essential terms and conditions of employment.” In BFI, the NLRB announced it would now also impose joint employer liability where an entity has “indirect” control and “unexercised potential” control over another entity’s employees.
Joint employers have a duty to bargain with any union representing the jointly employed workers and share liability for violations of the NLRA as it pertains to these workers or any union representing them. As noted by the Board’s two dissenting members, this new rule will “subject countless entities to unprecedented new joint-bargaining obligations that most do not even know they have, to potential liability for unfair labor practices and breaches of collective bargaining agreements, and to economic protest activity, including what have heretofore been unlawful secondary strikes, boycotts and picketing.” Furthermore, as the dissent highlighted in more practical terms, the ruling “is impermissibly vague and overbroad and will have substantial adverse consequences” to employers, putative contractors and employees alike.
Given this case is taking shape on the heels of the January 20 Administrator’s Interpretation (AI), released by the Department of Labor’s Wage and Hour Administration, expanding the view of who is a joint employer under the Migrant and Seasonal Agricultural Workers Protection Act and the Fair Labor Standards Act, it is likely that lawsuits on the subject of joint employment will continue to grow. See the CUPA-HR Washington Insider Alert on the AI.