On December 28, 2018, a divided D.C. Circuit panel affirmed, in part, the National Labor Relations Board’s (NLRB’s or Board’s) Browning-Ferris joint-employer analysis. See Browning-Ferris Indus. of Cal., Inc. v. NLRB, No. 16-1028 (D.C. Cir. Dec. 28, 2018). The D.C. Circuit’s decision marks the latest chapter in the NLRB’s ever-shifting joint-employer standard.
At issue on appeal was the Board’s divided Browning-Ferris decision in 2015 overruling longstanding precedent and relaxing the evidentiary requirement for finding a joint-employer relationship. In December 2017, after the Board’s composition changed with two Trump administration appointments, the new Board majority overruled Browning-Ferris in Hy-Brand Industrial Contractors, Ltd. et al., 362 NLRB 186 (2017). Then, in February 2018, the Board vacated its decision in Hy-Brand, reinstating the earlier Browning-Ferris holding, deciding that one of the new Board members should not have participated in the Hy-Brand decision. With the NLRB’s earlier Browning-Ferris decision reinstated, the D.C. Circuit restored to its docket the Browning-Ferris appeal. Later, in September 2018, the NLRB announced a much-anticipated proposed regulation to establish a rule-driven standard for determining joint-employer status under the National Labor Relations Act (NLRA). With the public comment period on the proposed regulation open through January 14, 2019, the D.C. Circuit issued its decision.
In a 51-page opinion, the D.C. Circuit agreed with the Board’s determination that an employer’s mere right to control and indirect control over terms and conditions of employment are both relevant factors in the joint-employer analysis. The Court, however, faulted the Board for failing to confine its analysis to “indirect control” over essential terms and conditions of employment, rather than extending the analysis to indirect control over “routine parameters of company-to-company contracting,” which it held was inconsistent with common law precedent. Based on that distinction, the court remanded the matter to the NLRB for further consideration on that issue.
Notably, the majority defended its rendering judgment amid the Board’s pending rulemaking, holding that it is the court’s role – not the Board’s – to set the contours of the joint employer analysis. Challenging the Board’s authority to conduct rulemaking on the joint-employer issue, the majority saw “no point to waiting for the Board to take the first bite of an apple that is outside its orchard.”
In the end, the D.C. Circuit largely upheld the Browning-Ferris standard, meaning that – for now – employers are subject to the more relaxed evidentiary standard, which provides a much easier path for courts to find a joint-employment relationship.
For more information on developments in this area, please contact Betty Graumlich at firstname.lastname@example.org, Karl Fritton at email@example.com, or the Reed Smith lawyer with whom you normally work.