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Posts Tagged ‘NLRB’

Updates on the “Joint Employer” Standard

Posted on: October 10th, 2017

By: Tim Holdsworth

More than two years have passed since the National Labor Relations Board (“NLRB”) handed down its new and controversial joint employer standard in Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). As you may recall, that decision greatly expanded the standard under which an entity could be found as a joint employer under the National Labor Relations Act (“NLRA”). In departing from its own well-established standards, the NLRB announced that they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. They also announced they will no longer require the employer’s control to be exercised directly and immediately. Instead, the NLRB declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

The U.S. Department of Labor (“DOL”) adopted a similar standard for who it considered a “joint employer” under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act shortly thereafter.

Neither of these controversial steps has fared well. The Browning-Ferris decision has been under attack in courts, while the DOL rescinded its guidance earlier this year under new Labor Secretary Alex Acosta.

Legislative efforts also have been made to give further guidance to businesses that have struggled with the uncertain and convoluted joint employer scheme. Recently, the U.S. House of Representatives Education and Workforce Committee approved a bill that would amend both the NLRA and FLSA to require that a company exert “direct, actual and immediate” control over workers to be considered an employer.

We will continue to monitor this legislation and provide any updates. For now, however, employers need to know that the Browning-Ferris standard is still in effect.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

NLRB Reverses Standard for Multi-Employer Bargaining Units

Posted on: July 19th, 2016

holdsworth_blogBy: Timothy Holdsworth

Once again, the NLRB has overturned precedent in their quest to dramatically expand employer liability.  For over a decade, the NLRB has held that multi-employer bargaining units that include temporary employees from a staffing employer (“supplier employer”) and regular employees of a company that jointly employs temporary workers (“user employer”) require the consent of both employers.  Last week, in Miller & Anderson, the NLRB overturned that precedent by ruling that a union may now organize this type of mixed-employee unit without employer consent.  Instead, the employees need only share a community of interest.  In doing so, the NLRB returned to the union-friendly standard from M.B. Sturgis, Inc., 331 NLRB 1298 (2000).

The standard creates numerous problems.  Most importantly, a user employer will have to bargain with a mixed-employee unit even when the majority of its regular employees vote against unionization.  In addition, the rule would also force supplier employers to bargain with unions that represent full time workers of user employers with which the supplier employer has absolutely no employment relationship.

In a previous blog, we discussed how the NLRB in Browning-Ferris reversed precedent to greatly expand its standard for determining whether an employer is a “joint employer,” finding that employers may now be joint employers if they have even the potential to control working conditions.  In light of that ruling, Miller & Anderson takes on greater meaning as companies will more likely be found to be joint employers, thereby creating the types of multi-employer bargaining unit problems discussed above.

Employers should examine business relationships where they have authority to exercise control over employees, and therefore could be found to be joint employers of some of their workforce.  As Board Member Miscimarra has noted regarding joint employment, Browning-Ferris “has already created an analytical grab bag from which any scrap of evidence regarding indirect control or incidental collaboration may result in joint employer status.”

NLRB Doubles Down on ‘Joint Employer’ Standard Expansion

Posted on: October 2nd, 2015

blog 1By: Tim Holdsworth

On August 27, 2015, the National Labor Relations Board discarded thirty years of precedent and handed down a new and expanded definition of joint employer. See Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). This decision comes on the back of the National Labor Relations Office of the General Counsel’s determination last year that McDonald’s USA, LLC, could be named as a joint employer in forty-three unfair labor practice complaints against its franchises, as previously discussed here.

In the August decision, the Board found that an entity is a joint employer if (1) there is a common-law employment relationship between the employee and employer, and (2) the entity possesses sufficient control over an employee’s essential terms and conditions of employment. In determining the entity’s control the Board announced two major departures from precedent in their inquiry, although the majority characterized these changes as merely “reaffirm[ing]” the standard articulated by the Third Circuit in N.L.R.B. v. Browning-Ferris Indus. of Pennsylvania, Inc., 691 F.2d 1117, 1119 (3d Cir. 1982). First, they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. Second, they will no longer require the entity’s control to be exercised directly and immediately. Instead, the Board declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

Applying this new standard, the Board found that Browning-Ferris Industries, the owner of a recycling facility, was a joint employer with Leadpoint, its subcontractor, for workers supplied by Leadpoint that would manually sort materials, clean screens and clear jams on the sorting equipment, and clean the facility.

Although this decision only sets an NLRB standard and has not yet been endorsed by a federal court, given the uncertain scope of what constitutes “indirect control” sufficient to determine an entity is a joint employer, it clearly reaffirms the agency’s effort to dramatically expand employer liability despite decades of contrary decisions. We might also see the NLRB’s standard gain traction in federal courts, where plaintiffs are already pushing for an expansion of employer liability to franchisors under different theories.

In sum, the Agency’s decision to expand the joint employer standard may have a profound effect not just on franchisors, but on labor relations and business relationships in general.

NLRB Focus on Employee Handbooks of Employers

Posted on: July 17th, 2015

employee handbookBy: Joyce M. Mocek

Over the last several months, the National Labor Relations Board (NLRB) has targeted employee handbooks and policies of both union and non-union employers, determining that their policies and procedures constitute “unfair labor practices.”   The NLRB continues to expand its interpretations of the type of actions that constitute such practices, recently holding that dress code, personal hygiene and social media policies in a car dealership’s employee handbook were “unfair labor practices.”

Under Section 7 of the National Labor Relations Act (NLRA) employees have the right to “self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection….”  Section 8 of the NLRA states that it shall be an “unfair labor practice” for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7.”

On March 18, 2015, the NLRB issued Memorandum GC-15004, a 30 page document that included provisions of employee handbooks and policies with specific examples of language that it determined was a violation of Section 7 of the NLRA.  The NLRB applied a standard of what employees would “reasonably” believe to be an intrusion of their rights.   These decisions attacked language such as “Be respectful of others and the Company” and held that general provisions such as this to be unlawful because they could be considered to ban criticism or negative discussions.   Further expanding their reach, recently, the NLRB determined that a car dealership’s employees had a right to display union messaging and insignia in the workplace although the company’s handbook language prohibited such displays, and held that the company’s social media policy was too restrictive.

These decisions illustrate the continuing focus of the NLRB to target the employee handbooks and policies of both union and non-union employers, and the necessity to review handbook policies and procedures to ensure compliance with these requirements and decisions.

 

NLRB Claims Franchisor and Franchisees are ‘Joint Employers’ – Is McDonald’s Just The First?

Posted on: August 19th, 2014

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By: Bradley T. Adler and Frank H. Hupfl, III

In a surprising departure from established Board precedent, the National Labor Relations Office of the General Counsel announced on July 29, 2014 that it had authorized the NLRB’s Regional Directors to issue 43 unfair labor practice complaints against McDonald franchisees and determined that their franchisor, McDonald’s USA, LLC, could be named as a joint employer.  The announcement comes as a shock to the franchise community and marks a startling conflict with roughly thirty years of established franchise law.

Under the traditional franchisor/franchisee relationship, a franchisee is an independent entity from the franchisor and is not viewed as a joint employer with the franchisee.  The NLRB’s recent announcement seeks to shake up that precedent.

With roughly 90% of McDonald’s more than 14,000 restaurants owned and operated by franchisees, the NLRB’s recent announcement could have significant ramifications for the fast-food company.  In a recent statement, the NLRB said it had received 181 complaints of unfair labor practices since November 2012 alleging that McDonald’s franchisees or their parent franchisor had violated employees’ rights to engage in protected activity under the National Labor Relations Act.  Of the 181 complaints, the general counsel’s office determined that 43 of the cases had merit.  The remaining complaints are either pending or were found to be meritless.

Since the NLRB’s announcement, McDonald’s and other franchise associations have issued statements opposing the general counsel’s determination and warning of the potential devastating effects the NRLB’s holding could have on the franchise world.  We will continue to keep you updated on this novel development.