NLRB Revises Joint-Employer Standard as Applied to Staffing Agencies

posted by Michael R. Fortney  |  Oct 1, 2015 08:41 AM in Employment Law:Workplace Issues

In a recent decision, the National Labor Relations Board (NLRB) clarified its joint-employer standard, deciding that employers do not need to exercise their authority to control employees' terms and conditions of employment to be considered a joint employer, but merely need to possess the authority to control the terms and conditions of employment.

The Browning-Ferris case involved Browning-Ferris Industries (BFI), a waste management company, and Leadpoint, a staffing agency. BFI used employees provided by Leadpoint to perform the work of sorters, screen cleaners, and housekeepers.  The union representing BFI employees claimed that BFI and Leadpoint were “joint employers” and that the Leadpoint employees working at BFI were therefore subject to the terms and conditions of employment contained in the bargained for collective bargaining agreement.  The union sought to represent nearly 240 Leadpoint employees working at the BFI plant.

The NLRB agreed with the union's point of view. The NLRB first analyzed the management of employees at the BFI facility, and found that the following factors leaned towards a finding that BFI and Leadpoint were joint-employers of Leadpoint employees.

  • Both companies have onsite supervisors at the BFI facility;
  • BFI supervisors and Leadpoint supervisors are both in charge of maintaining Leadpoint employees;
  • BFI supervisors also monitor the areas where Leadpoint employees work;
  • While Leadpoint is responsible for the recruitment and hiring of employees, the employees it hires must meet or exceed BFI's hiring protocols;
  • Leadpoint is not permitted to hire former BFI workers;
  • BFI may choose which Leadpoint employees work at the plant;
  • BFI dictates the number of Leadpoint employees assigned to each work station;
  • Leadpoint and BFI supervisors hold joint meetings each workday to coordinate a plan for the day;
  • BFI managers set productivity standards for Leadpoint employees;
  • Leadpoint employees receive essential training and counseling from BFI management; and
  • BFI communicates concerns about Leadpoint employees directly to Leadpoint supervisors.

The NLRB found that BFI and Leadpoint are joint-employers of the sorters, screen cleaners, and housekeepers at the BFI facility primarily because the two employers share or codetermine the terms and conditions of employment by merely possessing the ability to control terms and conditions of employment, even if they do not actually exercise that control.

The NLRB's decisions in Harvey Aluminum, Jewel Tea, Ref-Chem, and Value Village throughout the 1960s and 70s found joint-employer status for employers who "retained the contractual power to reject or terminate workers; set wage rates; set working hours; approve overtime; dictate the number of workers to be supplied; determine the 'manner and method of work performance'; 'inspect and approve work'; and terminate the contractual agreement itself at will." Browning-Ferris, supra at 9. Thus, the Board found in those decisions that in order to exercise control over the terms and conditions of employment, a joint-employer doesn't need to direct each and every aspect of employment. Instead, having ultimate control over employment is enough.

The NLRB's Browning-Ferris decision is a return to the theories discussed in those cases from the ‘60s and ‘70s. The decision emphasizes the NLRB's belief that the restriction placed on the joint-employer standard by the NLRB over the last 30 years, namely that potential joint-employers actually exercise control over terms and conditions of employment, was erroneously put in place. This decision, therefore, is an attempt by the NLRB to rectify their past error.

The NLRB’s decision coincides with the temporary employee/contingent worker industry becoming a large part of the United States workforce. The industry has more than doubled in size between 1990 and 2008, and stands to nearly double again between 2008 and 2022. Since the NLRB is required to apply "the Act to the complexities of industrial life," the NLRB found that it must apply the act to the current complexity of industrial life, employment staffing agencies. Browning- Ferris.  

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