Hy-Brand Industrial Contractors – the recent Board case overturning Browning Ferris Industries and restoring the previous joint employer standard – was perhaps the most important decision among the many decided prior to former Board Chairman Miscimarra stepping down in late 2017; but the decision may not be as significant for all.
As explained in an earlier Alert, the Republican-controlled Board returned to the pre-BFI standard in place for decades and once again found that joint employer status depends on whether entities have “direct and immediate” control over employees’ terms and conditions. And, even though Browning Ferris Industries exposed corporations that franchise to greater legal liability by making it easier to find joint employer status, overturning this incredibly broad standard is less substantial for those employers who do not just sit on the sidelines and observe (reserved control) but who actually have direct and immediate control over the employment terms of another entity.
Primarily, Hy-Brand is a huge victory for business advocacy groups and employers of all sizes as it returns the joint employer standard to its logical place and abandons the nonsensical propositions put forth in Browning Ferris Industries. Additionally, since Hy-Brand applies retroactively to all pending cases regardless of stage in the proceedings, respondents involved in such matters can expect any evidence of indirect and reserved control that the NLRB may have against them to likely be moot and not bear any impact on the outcome.
Hy-Brand will also present the NLRB’s new General Counsel, Peter Robb, with a decision in terms of resources the Agency will allocate when cases purport to show a joint employer finding by relying more on reserved, non-exercised control evidence rather than direct and immediate control. Still, notwithstanding how the General Counsel decides to allocate Agency resources, one thing is certain: businesses – large, small, and in between – can rest a little more easily knowing several Obama-era policies are on their way out.
Carlos A. Torrejon is a former NLRB Attorney and an associate in the firm’s Labor and Employment Department, resident in its Morristown office.