National Labor Relations Board’s New Joint Employer Standard Expands Risks for Employers

September 10, 2015

In a potentially game-changing decision in Browning-Ferris Industries of California, Inc., a three-member majority of the National Labor Relations Board (the “Board”) cast aside its long-standing joint employer test in favor of a highly union-friendly standard that is likely to expand greatly the number of employers subject to collective bargaining and other obligations under the National Labor Relations Act (the “Act”). Prior to Browning-Ferris, an entity that did not directly employ workers who provided services to it would only be deemed to be a “joint employer” of those workers if it “share[d] or codetermine[d] those matters governing the essential terms and conditions of employment” and exercised “direct and immediate control” over those terms and conditions. The majority in Browning-Ferris rejected this latter requirement, holding that “we will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but must also exercise that authority, and do so directly, immediately, and not in a ‘limited and routine’ manner.” Instead, the majority concluded, the “right to control” alone, even when unexercised, “is probative of joint employer status.”

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