For nearly three decades, the NLRB has applied the same test to determine whether two companies are “joint employers” under the NLRA. Recently, the NLRB announced that it was inviting (pdf) interested parties to submit briefs on the question of whether the NLRB should change that test, and if so, what the test should be. Employers everywhere should hold their breath and hope for the best.
The test that the NLRB has followed since 1984 asks whether two companies share the ability to control or co-determine essential terms and conditions of employment. Essential terms and conditions of employment include things like hiring, firing, discipline, supervision, and direction of employees. The control must be direct and immediate, and the authority to make routine directions of where to do a job are not sufficient.
The particular case at issue arose out of a solid waste recycling facility. The owner of the facility directly employed individuals who worked on the outside of the facility, moving waste materials around. The owner subcontracted with another employer, however, to provide labor to run the inside of the facility, like sorting the waste, cleaning the facility, and clearing jams.
A union sought to represent the employees of the subcontractor, and alleged that the owner of the facility was also an employer. If the owner is an employer, it would mean that the owner would have a duty to bargain with the employees of subcontractor like the subcontractor itself. A regional director of the NLRB, applying the longstanding test, found (pdf) that the owner and the subcontractor were not joint employers.
The implications of any change in the joint employer standard could be quite significant. Clearly, any employer who subcontracts functions to another company could be impacted. But the case has ramifications beyond that context as well. For example, employers who use temporary agency workers could find that their existing expectations of the rules that govern those relationships, at least from a labor law point of view, have changed depending on the outcome of the case.
Any interested party that wishes to submit a brief must do so by June 26, 2014. The case will likely not be decided until later this year, and maybe not even until 2015.