NLRB’s Definition of “Employer” Could Have Wide-Ranging Effects


By Andrew Kimble

On August 27, 2015, the National Labor Relations Board redefined “joint employers” in a way that will impact the rights of workers in a broad range of industries.

The case addressed whether a waste management firm, Browning-Ferris, should be held responsible for labor violations committed by their contractors.  The NLRB concluded that Browing-Ferris was a “joint employer” of their contractors’ employees, because the two companies “share or co-determine those matters governing the essential terms and conditions of employment.”  As a result, both joint employers could be required to collectively bargain with the contracted employees, and were responsible for their contractor’s labor practices.

This is a notable departure from previous rulings, where the NLRB held that companies were responsible only for those working under their direct control.  But on Thursday, the Board said that the old standard was “increasingly out of step with changing economic circumstances.”  The decision comes in response to the growing trend in the U.S. for companies to employ temporary workers and contract workers through staffing agencies or other third parties.  This arrangement allows large companies to disclaim responsibility for the conditions of employment while leaving employees in limbo between the company that is listed on their paycheck and the company that directs their work.

Two dissenting NLRB appointees railed against the decision, saying it “dramatic implications” on labor relations policy and its effect on the economy.  Exactly what effect it will have is to be determined, but business groups are concerned that the franchisor-franchisee relationship is in danger.  While the decision does not address franchises, its logic can easily be extended to such arrangements.  If it is, franchisors will have increased responsibility in a broad range of industries, including hotels and hospitality, restaurants and fast food chains, manufacturers, construction firms, retail workers, and staffing agencies.

If you are an independent contractor, work for a staffing agency, or your work is subject to the control of two or more companies, you should contact an employment attorney to better understand your rights.  Call Kimble Law Office today for a free consultation.

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