NLRB Overrules the Browning-Ferris Joint Employer Test

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On December 14, 2017, the National Labor Relations Board (“NLRB” or “Board”) limited liability in employment law cases by heightening the standard for what constitutes a joint employer.  In its 3-2 decision, the NLRB overruled its 2015 decision in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery (“Browning-Ferris”)[1] and abandoned the Obama-era expansion of the Board’s test for determining joint employment.

Under Browning-Ferris, companies faced greater responsibility for the employment practices of their contractors and franchisees.  Under the new rule – which is really just a return to the old pre-Browning-Ferris rule – a finding of joint-employer status requires proof that putative joint employer has:

  • Actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control);
  • Exercised “direct and immediate” (rather than indirect) control.

The NLRB held that joint-employer status will not result from control that is “limited and routine.” Proof of indirect control, contractually-reserved control that has never been exercised, or limited and routine control will not be sufficient to establish a joint-employer relationship.

[1] 362 NLRB No. 186 (2015)

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