NLRB Overrules Browning-Ferris Industries and Reinstates Prior Joint-Employer Standard

Washington, D.C.—In a 3-2 decision, the National Labor Relations Board today overruled the Board’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”), and returned to the pre–Browning Ferris standard that governed joint-employer liability.

In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. Accordingly, under the pre–Browning Ferris standard restored today, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship. The Board majority concluded that the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.

Applying the reinstated pre–Browning Ferris standard, the Board agreed with an administrative law judge’s determination that Hy-Brand Industrial Contractors, Ltd. (Hy-Brand) and Brandt Construction Co. (Brandt) were joint employers and therefore jointly and severally liable for the unlawful discharges of seven striking employees.

Chairman Philip A. Miscimarra was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Members Mark Gaston Pearce and Lauren McFerran dissented in the case.