As my colleague Andrew MacDonald blogged on February 27 (here), the Board overturned its test for joint employer liability for the second time in approximately two months when it vacated Hy-Brand Contractors Ltd., 365 NLRB No. 156 (2017), which overruled the Obama Board’s decision in Browning Ferris Industries, 362 NLRB No. 186 (2015). Thus, Browning Ferris is currently law of the land, but perhaps not for long.
Prior to Browning Ferris, the putative joint employer needed to exercise “direct” and “immediate” control of the primary employer’s employees’ wages and working conditions. After Browning Ferris, joint employer liability can be based on that putative joint employer’s “indirect” or “reserved” control of the primary employer’s employees’ wages and working conditions, irrespective whether the putative joint employer ever exercised such control. It is enough that the putative joint employer retains the ability to share or codetermine the primary employer’s employees’ wages and working conditions. This is common in the franchise industry and with businesses that utilize third party service contractors. Thus, business and the management labor bar are anxious for the Board to overrule Browning Ferris and reinstate the “direct” and “immediate” control test.
That time may be near. Law360 published an article on April 24, 2018 (hyperlink) noting that there are three cases presently before the Board that raise the joint employer issue and may be the proper vehicle for the Board to overrule. The cases are Oxford Electronics and Worldwide Flight Services, Inc., 13-CA-115933, Orchid Paper Products Co., 14-CA-184805, and Preferred Building Services , Inc., and Rafael Ortiz, 20-CA-149353. These three cases are potentially good vehicles to overrule Browning Ferris because it appears neither current Chairman John Ring and Board Member William Emanuel, nor their former law firms represent parties in any of these three cases. Assuming the Board (1) does not rely on the dissent in Browning Ferris (this tripped up Emanuel in Hy-Brand and resulted in Hy Brand’s vacatur) or its now vacated majority decision in Hy-Brand and (2) prospectively applies its new position on the joint employer issue, the Board should be free to overrule Browning Ferris and require “direct” and “immediate” control before branding a business a joint employer. The Board should be able to do this because there would be no basis to argue either Ring or Emanuel have a conflict of interest, real or perceived, as these three cases will have no direct effect on the current Browning Ferris decision or any other case Ring, Emanuel, or their former firms currently have pending before the Board.
That said, do not expect organized labor to sit back and simply allow Browning Ferris to be overruled. There are calls from the labor bar for Emanuel to resign. Should he do that, the Trump Board would not have the necessary three votes to overrule Browning Ferris. However, it seems unlikely Emanuel will resign. Organized labor is alternatively arguing that Emanuel should recuse himself from all cases concerning the joint employer issue based on his firm’s previous involvement in Browning Ferris. However, issue preclusion is likely a nonstarter as the Board has never required its members recuse themselves from considering certain issues, just certain cases in which the member or their firms have been before the Board. Labor practitioners of all types – labor and management – address a multitude of issues during their careers that come before the Board, so basing recusal on an issue preclusion standard would most likely disqualify anyone with experience from serving on the Board. This would benefit neither labor nor management.
Thus, the Board may have a good opportunity to reverse Browning Ferris some time before the end of this year if it chooses to use one of these cases to reconsider the current joint employer standard.