Today the National Labor Relations Board issued its long-awaited ruling in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), a 3-2 decision overruling the NLRB’s prior joint-employer standard adopted in 1984. The Board majority, consisting of Chairman Pearce and Members Hirozawa and McFerran, prefaced its need for revisiting the thirty-year-old standard on the fact that “the Board’s view of what constitutes joint employment under the Act has narrowed, [and] the diversity of workplace arrangements in today’s economy has significantly expanded.” By making its joint-employer standard much more encompassing, the Board majority claims that it is:
put[ting] the Board’s joint-employer standard on a clearer and stronger analytical foundation, and within the limits set out by the Act, to best serve the Federal policy of “encouraging the practice and procedure of collective bargaining.”
Under the Board’s new test, it will find that:
two or more statutory employers are joint employers of the same statutory employees if they “share or codetermine those matters governing the essential terms and conditions of employment.” In determining whether a putative joint employer meets this standard, the initial inquiry is whether there is a common-law employment relationship with the employees in question. If this common-law employment relationship exists, the inquiry then turns to whether the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.
… We will no longer require that joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry. … Nor will we require that, to be relevant to the joint-employer inquiry, a statutory employer’s control must be exercised directly and immediately. If otherwise sufficient, control exercised indirectly–such as through an intermediary-may establish joint-employer status.