The National Labor Relations Board’s definition of what constitutes a “joint employer,” as expanded in the 2015 case Browning-Ferris Industries of California Inc., faced intense scrutiny during oral argument of an appeal of that decision this past Thursday before the D.C. Circuit Court of Appeals. Being deemed a “joint employer” has been of particular concern for separate unrelated businesses linked for business purposes to a common group of employees where one only operates on a union basis, since such a determination renders the non-union entity bound to the relevant collective bargaining agreement. No decision on the appeal has been issued at this time; however, the comments from the bench during oral argument may signal a potential retreat from the Brown-Ferris ruling. A decision from the court will likely take several months.
In Browning-Ferris, the NLRB decided to go beyond the narrow 30 year old traditional test used in prior cases when determining whether a company qualifies as a “joint employer.” Under a new and widened standard, a business could be deemed a joint employer if it merely exerts “indirect control” over a contractor or reserves for itself the ability to exert such control. The previous standard required a business to exert “direct and immediate” control over terms and conditions of employment in order to be considered a joint employer.