The National Labor Relations Board (NLRB) has adopted a more expansive definition of “joint employer” under the National Labor Relations Act.
The move came in a 3-2 decision involving Browning-Ferris Industries of California. As part of the decision, the NLRB refined its standard for determining joint-employer status “to better effectuate the purposes of the Act in the current economic landscape.”
With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.
In the decision, the Board applies long-established principles to find that two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will—among other factors— consider 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 its decision, the Board found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various work functions for BFI, including cleaning and sorting of recycled products. In finding that BFI was a joint employer with Leadpoint, the Board relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint as well as BFI’s reserved authority to control such terms and conditions.
The Board ordered that within 14 days the ballots that were impounded on April 25, 2014 shall be counted and the appropriate certification issued.
What does it mean for c-stores?
The National Association of Convenience Stores (NACS) pointed out that the new standard is expected to have a major impact on the franchisor-franchisee relationship, so much so that franchisors could potentially be held liable for the labor practices at its franchise locations.
Under the new standard, simply possessing the authority to control terms and conditions of employment is sufficient to be held as a joint employer, even if you aren’t actually controlling those terms and conditions.
NACS reported that it expects the new standard will likely result in numerous legal challenges as additional labor complaints are brought against companies.
Additionally, the change in the joint employer definition is expected to be highly controversial in Congress.