NLRB Decision Refines Joint-Employer Status.

Benefits Insights, Fall 2015

In a recent 3-2 decision involving Browning-Ferris Industries (BFI) of California, the National Labor Relations Board (NLRB) refined its standard for determining joint-employer status. The revised standard expands on who may be considered a joint employer under the National Labor Relations Act and lowers the threshold for determining joint employer status. As a result, it’s more likely employers may be considered joint employers under the Act.

The most significant change involves how an employer is determined to be a joint employer. The NLRB will consider a variety of things, particularly whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.

In the past, this control had to be used in practice and the ability to control or co-determine employment had to be shared. Now, indirect control over terms and conditions of employment may be adequate justification to generate a joint employment relationship.

NLRB’s decision to revise the determining standard was stated as a way “to better effectuate the purposes of the Act in the current economic landscape.” The NLRB held that the previous joint employer standard had failed to keep pace with changes in the workplace and economic circumstances. Nonetheless, the revision of joint employer status is an important change for employers who could now be subjected to potential joint liability for unfair labor practices or breaches of collective bargaining agreements and even to joint bargaining obligations.

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NLRB Decision Refines Joint-Employer Status