Browning-Ferris Industries of California, Inc., et al, could
provoke a test that sweeps most outsourcing arrangements into joint employment
The National Labor Relations
Board (NLRB) is poised to make several decisions that could significantly
affect your workplace. Its agenda is unabashedly activist. Its general counsel
Richard Griffin, Jr. (who, interestingly, is the former general counsel of the
International Union of Operating Engineers) has published advice memoranda that
confirm the NLRB’s prosecutorial agenda, including:
- Increasing scrutiny and involvement in the non-union workplace
- Expediting the process for conducting union representation elections
- Broadening a successor company’s obligation to bargain
- Voiding arbitration agreements with class action prohibitions
- Restricting confidentiality rules during employer investigations
- Expanding rights to representation in the nonunion workplace
- Controlling employer handbooks and policies concerning at-will employment, confidentiality, workplace decorum, social media, and employee use of employer email systems
This agenda is far too much
for detailed evaluation in a single article. One pending case is both illustrative
and hyper-significant because it affects every business that subcontracts or
outsources any function: i.e., 100 percent of American business. Browning-Ferris
Industries of California, Inc., et al., v. Sanitary Truck Drivers and Helpers
Local 350, International Brotherhood of Teamsters will turn on the standard
for determining joint-employer status — a standard that the NLRB has
indicated that it wants to alter. The current standard was articulated in TLI,
Inc., 271 NLRB 798 (1984), and Laerco Transportation, 269 NLRB 324
(1984). There, the NLRB held that legally separate entities are joint employer
only when they actually share the ability to control or co-determine the
essential terms and conditions of employment (i.e., hiring, firing,
discipline, supervision, and direction of employees). Plus, the putative joint
employers’ control over these employment matters must be direct and immediate.
Browning-Ferris Industries of
California, Inc., et al., arose
in a union representation case. The Teamsters union sought to organize
recycling sorters directly employed by a subcontractor, Leadpoint Business
Services, but also asserted that Browning-Ferris Industries of California Inc.
(BFI) was a joint employer with Leadpoint. The NLRB’s regional director applied
the established standard and found that BFI did not exert sufficient control
over Leadpoint’s workers,(e.g., BFI did not control pay or benefits, did
not have authority to recruit, hire or fire, did not control the sorters, and
gave them only routine instructions,) and noted that Leadpoint had its own
human resources department. He concluded that Leadpoint was the sole employer
and directed an election.
The Teamsters appealed,
stating, “This case presents an opportunity … to address how best to evaluate
joint-employer status in this increasingly common setting: workplaces where
employers use labor contractors or staffing agencies to supply workers.”
Simultaneously, a union blog post announced that it would urge the NLRB “to
overhaul its dated and toothless test of joint-employer status.” After granting
the union’s request for review, the NLRB extended an invitation for interested
parties to file amicus briefs addressing whether it should maintain the
existing joint-employer standard or adopt a new one.
With President Obama’s
appointees filling all five seats at the NLRB, the betting odds prohibitively
favor a decision that will abandon the historic test for joint employers in
favor of a test that sweeps most outsourcing arrangements into joint employment.
It is expected that the NLRB’s ruling likely will make it easier for unions to
organize ‘temp’ workers and to include bargaining units with the employees of
the “joint employer.” This likely is just the first step in the Board’s
initiative to modify the joint employer standard under the National Labor
Relations Act, and to make it easier for unions to organize workers.
Since the NLRB has proposed
shortening the time between when a representation petition is filed with the
NLRB, and when a union election is held from an average of 38 days to as few as
10 days, and to require employers to quickly provide union organizers with
extensive information about employees, the impact of Browning-Ferris
Industries will be compounded. The risk of a new joint employer standard is
highest for employers like BFI which have contractors working on its own
premises. If your business model includes that feature, it is time to
start thinking prophylactically.
Historical paradigms are
changing. The model where each silo in the supply chain was responsible for its
own employees and any employment law issues concerning those employees is gone.
What can and should your business do? First, determine whether contractors can
be moved offsite or eliminated. Second, include indemnification provisions that
hold your contractors or suppliers responsible for any damages or liability
suffered. Finally, investigate the reliability (to pay that indemnity) and
credibility (as good corporate citizens who can be counted on to obey rather
than flout laws) of those entities that you do business with.
Source: Inside
Counsel
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