Today, the National Labor Relations Board overruled the Board’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”), and returned to the pre–Browning Ferris standard that governed joint-employer liability.
Today’s decision affects all future and pending cases. Under the pre-Browning Ferris standard, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine.
Under this pre-Browning Ferris standard, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship. The 3-2 Board majority concluded that “the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.”
Today’s decision is positive news for employers, particularly those who utilize staffing companies.
If you have any questions about how this decision affects your business, our Labor & Employment attorneys can help you.