On August 27th in the Browning-Ferris Indus. of Cal., Inc. case, the National Labor Relations Board (NLRB) changed its more than 30 year stance on determining whether 2 or more companies have a joint employer relationship. In the past, there was no joint-employer relationship without a significant degree of “direct and immediate” control. This “direct and immediate” control included instructing employees of another company what hours to work; how duties should be handled; disciplining employees, etc. With this 3 to 2 decision, the NLRB has lowered the bar needed to show a joint employer relationship. The ruling reads:
- “Under this standard, the Board may find that two or more statutory employers are joint employers of the same statutory employees if they ‘share or codetermine those matters governing the essential terms and conditions of employment.’”
This ruling has huge ramifications for employers who contract with staffing agencies or “outsource” functions or departments within their company. The Browning-Ferris Indus. of Cal., Inc. case centered around 240 employees of Leadpoint who were placed at Browning-Ferris Industries as temporary contract laborers and whose duties included manually sorting materials (residential mixed recyclables, commercial mixed recyclables, dry waste process and west waste process) by removing either recyclable or prohibited materials as well as cleaning sorting equipment screens, clearing jams and cleaning the facility. The Teamsters sought to represent these employees. With this decision, the NLRB ruled that Browning-Ferris Industries and Leadpoint have a joint employer relationship and therefore, the Teamsters can continue to seek to represent the employees contracted from Leadpoint. The Board based its decision on several factors including:
- “Although BFI does not participate in Leadpoint’s day-to-day hiring process….BFI retains the right to reject any worker that Leadpoint refers to facility.”
- “Although Leadpoint is responsible for selecting the specific employees who will work during a particular shift, it is BFI that makes the core staffing and operation decisions that define all employees’ work days.”
This decision means that companies would be subject to union representation attempts and collective bargaining for not only their immediate employees but also contracted employees when a joint employer relationship is deemed to exist.
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