AGC, its coalition Coalition for a Democratic Workplace, and other employer organizations, submitted a group amicus brief in a case before the National Labor Relations Board (“NLRB” or “Board”) addressing the standard for determining when two companies constitute “joint employers” under the National Labor Relations Act (“NLRA”).
The case, Browning-Ferris Industries of California, Inc., involves BFI’s use of a labor supplier at one of its recycling facilities. The Teamsters union sought to organize the supplied workers and filed a petition for a representation election with the NLRB. The question presented is whether BFI and the labor supplier are joint employers of those workers or whether the labor supplier is their sole employer. If the companies are joint employers, then they would be jointly responsible for any unfair labor practices and collective bargaining obligations with regard to the supplied workers. Such bargaining obligations can even restrict the customer employer’s freedom from terminating or modifying its business relationship with the labor supplier.
The Board adopted the current standard for determining joint employer status in the 1984 TLI and Laerco Transportation cases. Since then, the Board has found joint employer status when two separate entities share the ability to directly or immediately control or co-determine essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction of employees. Applying that standard in Browning-Ferris, the NLRB regional director found that the companies were not joint employers. On appeal, the Teamsters and the NLRB general counsel asked the Board to return to a broader standard, as applied prior to 1984. The general counsel, specifically, is seeking adoption of a standard under which an entity could be a joint employer if it exercises direct or indirect control over working conditions, has unexercised potential to control working conditions, or “where ‘industrial realities’ otherwise [make joint employer status] essential to meaningful bargaining.”
AGC’s group brief urges the Board to maintain the current standard. The “stability and predictability” of the standard has allowed companies “to structure their business relationships in a sensible and optimal fashion, subcontracting discrete tasks to other companies with specialized expertise to provide services that would otherwise be far more difficult or costly to supply,” the brief explains. “At the same time, the current joint employer standard has not denied any employee the right to union representation…nor has it prevented any union from bargaining with the employer directly involved in setting the terms and conditions of employment in a workplace.” The proposed alternative standard “would enmesh separate businesses in bargaining relationships over which they have no significant control without any materially greater protection of employee rights under the Act.” The brief specifically addresses construction, noting that the alternative “could have a particularly destabilizing impact on well-settled subcontracting practices in the construction industry.”
AGC will continue to monitor the case and will report on the Board’s decision when published.