Insights for the Labor Relations Professional


NLRB Decision Provides Example of New Joint Employer Standard in Action

By Nelson Cary

By Nelson Cary and George Stevens

Last week, the NLRB released an opinion finding joint employment status under the standard it retooled in the Browning-Ferris Industries (“BFI”) case in 2015.  At issue was a petition from the Laborer’s Union to hold an election to form a bargaining unit covering asbestos removal workers.  The Union argued that these workers were jointly employed by Retro Environmental (“Retro”), an asbestos removal company, and Green JobWorks (“Green”), a staffing agency which provided workers to Retro.  The NLRB majority agreed.

As we previously discussed, the new standard is far more expansive than anything from the three decades of settled case law that preceded BFI and focused on the question of control—even indirect or potential control—over a work force.  The importance of this retooling cannot be overstated; in fact, a previous blog post named it as one of the most important developments in 2015 and suggested that employers add an analysis of the new standard’s potential impact to their 2016 “To Do” list.  We predicted that it would not be long before it was felt, and we now have the clearest example yet of how the NLRB will apply the new standard.

First, the NLRB described the factors it would consider in determining whether alleged joint employers “‘share’ control over terms and conditions of employment or ‘codetermine’ them.” It reemphasized that, under the new test, the question was not just whether the joint employer actually exercised the authority to control employee’s terms and conditions of employment, but also whether the joint employer possessed that authority.

In making that determination, the NLRB indicated that it considers such things as hiring, firing, discipline, supervision, direction, and wages/hours. The NLRB also indicated that it considers whether the alleged joint employer could dictate the number of workers to be supplied, control scheduling, seniority, and overtime, assign work, and generally determine the manner and method of day-to-day work performance.

In this case, the NLRB first considered an expired lease of services agreement between the parties under which Retro and Green continued to operate. In finding that Retro and Green were joint employers of the employees in the petitioned-for unit, it noted that although Green was primarily responsible for hiring, assigning, disciplining, and terminating employees, Retro played a role in “codetermining the outcome of the hiring process.” Specifically, the agreement imposed conditions on Green’s hires, including prescreening, physical examination and drug-testing requirements, as well as various job qualifications and certifications.

Further, the NLRB found that—just like the relationship in BFI—Retro had the right to request that Green remove and replace any worker it found to be unsatisfactory.  Crucially, though Retro had not exercised this right within the six months preceding the hearing, Green’s president admitted that he could not imagine a situation in which Green would not agree to such a request.

The NLRB then considered the practical realities of the employers’ relationship. Green determined employees’ rates of pay, paid their wages, and provided benefits.  Retro’s foremen set hours and schedules, and also supervised the sequence and nature of day-to-day work.  Green’s on-site supervisor managed injuries and near misses, ensured employees were present, and handled specific employee concerns.  Retro made the core staffing and operational decisions that defined the work day, determined the start and end time for breaks, and tracked employee hours.  The NLRB noted, simply put, that “[b]etween them, [Retro and Green] control all of the employee’s employment terms.”

This case represents a good example of what employers can expect BFI’s new joint employer test to look like in practice, especially in the context of a staffing agency providing workers for a temporary project.  Employers should consider a review of their agreements and working relationships with such companies to evaluate the extent to which they could—as well as do—share “control,” as currently defined by the NLRB.

Tags: Elections, actual control


Insights for the Labor Relations Professional