Insights for the Labor Relations Professional


Court of Appeals Reverses NLRB Holding in Joint Employer Case

By Nelson Cary

Earlier this month, the D.C. Circuit Court of Appeals slowed down the NLRB’s move towards a relaxed test for whether a business is a joint employer for the purposes of the NLRA. While on first blush, the decision might seem to be good news for businesses that use staffing companies, or that subcontract business functions to other companies, it ultimately leaves open the possibility that the court may yet uphold an expanded joint employer rule.

At issue in last week’s case before the D.C. Circuit was CNN’s decision to terminate its contract with a staffing company that supplied camera operators. The union representing the employees filed a ULP, alleging that CNN was a joint employer, but failed to bargain with the union over its decision to terminate the staffing contract.

As of 2014, when the NLRB heard the case, the standard it followed to determine joint employer status required a business to have “direct and immediate control” over the actions and duties of workers. In the CNN case, however, the NLRB backtracked from this standard without expressly overruling it, stating that CNN merely needed to “share or codetermine” the essential terms and conditions of employment.

In holding that CNN was a joint employer, the NLRB relied on decisions from 1984 which set forth the “share or codetermine” language, failing to apply a decision from 2002 setting forth the standard of “direct and immediate control.” The D.C. Circuit overturned the NLRB in an opinion authored by former Supreme Court nominee Merrick Garland, holding that the NLRB acted improperly by ruling against CNN without explaining why it had abandoned the “direct and immediate control” standard.

If this “share or codetermine” sounds familiar, it is the standard the NLRB adopted in Browning-Ferris, which we have previously covered on this blog. That case, which came after the Board’s 2014 decision regarding CNN, announced a rollback of NLRB precedent on joint employer status, removing the direct control standard in favor of the “share or codetermine” standard.  The D.C. Circuit contrasted that decision with the CNN decision, pointing out that the NLRB thoroughly addressed its prior precedents, and explained their deviation from the direct control standard in Browning-Ferris.  Conversely, the NLRB panel in the CNN case failed to undertake any such explanation, rendering the CNN ruling improper.

The court sent the case back to the NLRB to be properly evaluated, meaning that the NLRB could in fact make the same ruling while relying on the principles outlined in Browning-Ferris.  When the case comes back, however, the NLRB majority may have been appointed by President Trump, meaning that reliance on the more lax Browning-Ferris standard is not guaranteed.  Indeed, the remand of the case could be used by a Trump NLRB to overrule the Browning-Ferris.

Also up in the air is how the D.C. Circuit will rule on the appeal of Browning-Ferris decision, which is currently pending.  A different group of judges is assigned to that case.  But, the court’s comments about the NLRB properly evaluating its own precedents in Browning-Ferris may foreshadow a willingness to uphold the “share or codetermine” standard.  The court heard oral argument in Browning-Ferris on March 9, 2017, so a decision is presumably drawing near.

Labor professionals should monitor developments in this case on remand to the NLRB, as well as the coming ruling on the Browning-Ferris appeal, as they will have major implications for the joint employer standard moving forward.

Tags: Courts, actual control, Browning-Ferris


Insights for the Labor Relations Professional