The National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., protects the rights of private-sector workers to organize into unions, to engage in collective bargaining, and to take collective action when needed. The law generally provides workers with a cause of action against their employers for violations of the NLRA. Employees of companies that are franchisees of a much larger company, or that are under contract with another company, may find their rights under the NLRA limited because of how the National Labor Relations Board (NLRB) has interpreted the word “employer” in recent years. In August 2015, the NLRB ruled that a company and its subcontractor were “joint employers” of the subcontractor’s employees for purposes of the NLRA. Browning-Ferris Industries of Cal., Inc., et al. (“Browning-Ferris II“), 362 NLRB No. 186 (2015).
The NLRB held in its recent ruling that it had established a general standard for joint employment over 30 years ago, based on the Third Circuit Court of Appeals’ decision in NLRB v. Browning-Ferris Industries of Pa., Inc. (“Browning-Ferris I“), 691 F.2d 1117 (3d Cir. 1982). The central question is whether the two companies “share or codetermine those matters governing the essential terms and conditions of employment.” Id. at 1123. Since 1982, the NLRB has “imposed additional requirements for finding joint-employer status” that, according to the NLRB, have no legal basis or justification. Browning-Ferris II at 1.
The respondents in the present case are a waste management company (WMC) and a staffing company (SC). The WMC operates a recycling facility that receives about 1,200 tons of material per day that must be sorted into waste, recyclable material, and usable commodities. It directly employs about 60 people, most of whom work outside the facility and who already have union representation. The SC, under a contract with the WMC, provides about 240 workers to work in the plant itself. The contract states that the workers are solely the employees of the SC. The union is seeking to represent these workers.
In considering whether the WMC and SC constitute joint employers of these workers, the NLRB noted that both companies employ their own supervisors to work at the plant and that the SC maintains supervisory authority over its employees. It also has sole responsibility under the contract for recruiting and hiring workers, subject to various restrictions and conditions from the WMC. The NLRB found, however, that while the contract states that the SC is solely responsible for disciplining its employees, the WMC has taken direct action to discipline SC employees on multiple occasions. Testimony also indicated that WMC managers have directly approached SC employees about work problems, rather than reporting the matter to an SC supervisor.
One of the additional conditions added to the joint employer test, the NLRB found, is that a joint employer must actually exercise its authority to control the terms and conditions of employment. The NLRB held that the authority to control is the relevant factor, regardless of whether it is used, and that the purpose of “joint-employer law” is not “to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace.” Browning-Ferris II at 21. It held that the companies met the standard for joint employers.
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NLRB Allows McDonald’s Employees to File Complaints Against McDonald’s and Individual Franchisees as “Joint Employers”, The New Jersey Employment Law Firm Blog, November 3, 2014