Union Seeks Labor Board Review of Regional Director’s Adverse Joint Employer Decision

In Green JobWorks LLC/ACECO, LLC, No. 05-RC-154596 (Oct. 21, 2015), discussed here, a case believed to be the first post-Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), to apply the new joint employer “test” articulated there, a National Labor Relations Board Regional Director found that a subcontractor and temporary staffing agency were not joint employers. Now, the petitioning union, disappointed by the ruling, has requested NLRB review of that decision.

The Regional Director declined to find joint employer status between ACECO, LLC, a demolition, environmental remediation and renovation services company and Green JobWorks (“GJW”), a temporary staffing agency because the Construction and Master Laborers’ Local Union 11 failed to establish “specific, detailed and relevant evidence” demonstrating a joint employment relationship.

In its request for review, the union has argued that if the Regional Director’s decision is permitted to stand, the Board’s new joint employer standard will be eviscerated “and joint employer determinations will continue to be based upon microscopic parsing of the degree and routineness of the control exercised or held by putative joint employers.” The union also argued that the Regional Director’s decision should be set aside because it was “clearly erroneous” regarding the level of control that ACECO asserted over Green JobWorks employees.

ACECO and Green JobWorks separately have opposed the union’s request. They argue the union relies on two faulty premises, that: (1) the Board’s new joint employer standard in effect is meant to impose joint employer status on all employee staffing arrangements; and (2) the relationship between ACECO and Green JobWorks is a “garden variety staffing relationship,” indistinguishable from the relationship in Browning-Ferris that was found to be a joint employer relationship by the Board.

The union has asked the Board to grant review, alleging the following NLRB criteria warrant review: (1) that a substantial question of law or policy is raised because of a departure from officially reported Board precedent; and (2) that the Regional Director’s decision on a substantial factual issue is clearly erroneous on the record and such error prejudicially affects the rights of a party. No time is specified for a Board ruling on the request.


We will continue to monitor this case and will keep you apprised of any further developments.


Subcontractor, Temporary Staffing Agency not Joint Employers, NLRB Regional Director Decides

An NLRB case involving the construction industry provides insight into how the agency’s new joint employer standard may be applied.

The Board’s decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015), provided that “the initial inquiry [under the Board’s new joint employer standard] is whether there is a common-law employment relationship with the employees in question.” The inquiry then turns to “whether the putative joint employer possesses sufficient control over employee’s essential terms and conditions of employment to permit meaningful collective bargaining.” For details, see Labor Board Sets New Standard for Determining Joint Employer Status.

In Green JobWorks LLC/ACECO, LLC, Case No. 05-RC-154596 (Oct. 21, 2015), a National Labor Relations Board regional director has declined to find a subcontractor and temporary staffing agency to be joint employers. Temporary staffing agency Green JobWorks (“GJW”) provided demolition and asbestos abatement laborers to a demolition, environmental remediation and renovation services company, ACECO, LLC. The Construction and Master Laborers’ Local Union 11 sought to represent a unit of laborers the union claimed was “jointly” employed by GJW and ACECO. However, the regional director found the parties’ Master Labor Service Agreement (“MLSA”) and the level of influence and control that ACECO exerted over GJW employees did not establish that GJW and ACECO, in fact, were joint employers.

The regional director relied heavily on the MLSA to find that GJW and ACECO were separate business entities with different management, that independently set and paid wages, maintained payroll records, withheld payroll taxes and provided workers’ compensation for their own employees. The MLSA also stated that hiring, discipline and discipline authority were solely within GJW’s exclusive discretion and control. For example, GJW recruited, hired and assigned its employees to ACECO sites, with negligible or no input by ACECO. Likewise, when GJW employees were removed from specific sites or when employment decisions were made by someone other than GJW, these decisions typically were made or directed by a general contractor or by a hygienist, not ACECO. Moreover, although the MLSA reserved the right for ACECO to remove GJW employees from job sites for safety reasons or any other reasonable objections, the regional director found this was not an unqualified right of refusal, unlike the right of refusal found to be evidence of joint employer status in Browning-Ferris Industries.

The regional director also found ACECO’s influence regarding wages was limited to the hourly rates negotiated between ACECO and GJW for certain projects, which he did not consider a strong indicator of joint employer status. Moreover, ACECO did not prohibit GJW from paying its employees more for comparable work and GJW employees could negotiate higher wages based on job record and related factors.

Finally, the regional director found ACECO exerted little to no control over “bargainable issues” such as break times, safety, speed of work and productivity.

Accordingly, the regional director directed an election for a unit comprised solely of workers employed by GJW at ACECO sites.

The union has the right to appeal the regional director’s decision, which is not considered binding in other cases.


Company’s Property Rights Can be Trumped by Safety Concerns, Federal Court Rules

Enforcing a National Labor Relations Board order, the federal appeals court in Chicago has held an employer unlawfully denied a union safety specialist access to its facility to examine the site of a fatal accident (the cause of which had not been determined) involving a bargaining unit employee. Caterpillar Inc. v. NLRB, No. 14-3528 (7th Cir. Oct. 2, 2015).

The NLRB had held the employer violated the National Labor Relations Act by refusing to grant a nonemployee union representative access to its facility for a health and safety inspection after a fatal acci­dent. The Board applied the balancing test ar­ticulated in Holyoke Water Power Company to conclude that where, as here, the issue implicated significant health and safety matters affecting unit employees, the employer’s property rights had to yield to the employees’ right to re­sponsible representation. In Holyoke, the union had requested the employer permit the union’s industrial hygienist access to a fan room to survey potential health and safety hazards. The employer denied the request, but gave the union a summary of a noise survey not limited to the fan room. (After the employer was charged with a violation, the company offered the union further information on noise levels in the fan room, but that study was not conducted by an industrial hygienist and it may have been affected by the positioning of the measuring equipment and of doors and louvers in the room.)

The Board held:

. . . we are constrained to balance the employ­er’s property rights against the employees’ right to proper representation. Where it is found that re­sponsible representation of employees can be achieved only by the union’s having access to the employer’s premises, the employer’s property rights must yield to the extent necessary to achieve this end. However, the access ordered must be lim­ited to reasonable periods so that the union can ful­fill its representation duties without unwarranted interruption of the employer’s operations. On the other hand, where it is found that a union can ef­fectively represent employees through some alter­nate means other than by entering on the employ­er’s premises, the employer’s property rights will predominate, and the union may properly be denied access.

Applying this test, the Board in Holyoke held that the employer’s alternative to the union-requested inspection, providing information, was inadequate, and that the employer’s property rights were outweighed so that it had to permit the union hygienist reasonable access to its fan room to conduct noise level studies. A federal appeals court enforced the Board’s order.

In Caterpillar, the Board also concluded the judge’s finding that the employer had a “significant competing interest” in protecting its confidential manu­facturing processes was at odds with his finding that the employer had a “considerable history” of allowing visitors to access the plant, noting “[t]he Board has long consid­ered access granted to third parties a relevant factor un­der Holyoke, as allowing others to enter the property weakens the relative strength of the employer’s interest in denying the union access to its property.” Further, the Court rejected the employer’s argument that showing the safety investigator reenactment videos was sufficient, finding instead that the videos were merely “two-dimensional” and did not include text or voices. The Court ruled, “[s]ince it is apparent that the materials shown [the investigator] were not an adequate substitute for an on-site investigation, and it is admitted that the investigation would have imposed trivial costs on the company unless the investigation revealed safety problems that were expensive to fix, the challenge to the Board’s order has no merit.”   This case suggests that employees’ and unions’ workplace safety concerns may find a receptive audience in the NLRB. For that reason, a union’s right to access a facility to investigate safety concerns could be held to trump an employer’s interest in preserving its property rights to exclude nonemployees, absent convincing reasons.

Act Two: Employer Failed to Provide Union with Available Voter Contact Information, NLRB Regional Director Finds

In Employer Ambushed by Labor Board’s New Election Rule, we reported that a National Labor Relations Board Hearing Officer decided that Danbury Hospital had not complied with its obligation under the NLRB’s new “quickie election” rule to provide the union which had petitioned to represent approximately 850 of the Hospital’s non-professional employees with “available” personal cell phone numbers and personal email addresses. As a result, the Hearing Officer recommended a re-run election. Now, on appeal, the NLRB Regional Director for Region One has affirmed the Hearing Officer’s decision. Danbury Hospital of the Western Connecticut Health Network, Case 01-RC-153086 (Oct. 16, 2015).

The Hearing Officer concluded that the voter list submitted by the Hospital did not substantially comply with the NLRB’s requirement that the Hospital provide “available” personal cell phone numbers and personal email addresses. She found the Hospital should have exercised at least a “reasonable amount of diligence” in compiling voter contact information — the Hospital searched only a single Human Resources database for the voter list information rather than seeking to supplement that information from other Hospital sources, such as the Nursing Department’s database, where it stored contact information for employees working on nursing units.

Both the Hearing Officer’s and Regional Director’s decisions are non-precedential. The Hospital has the right to file an additional appeal — a “Request for Review” — with the NLRB in Washington, by October 30. If the Request for Review is granted and the Regional Director’s decision affirmed, the decision will be binding.

We will keep you informed about the progress of this very important case. In the meantime, employers faced with complying with the new election rule should exercise good faith and diligence in searching for and providing a petitioning union with as much voter contact information as they reasonably can find.

Drug and Alcohol Testing May Contribute to Joint Employer Finding By NLRB

We have written previously about the National Labor Relation Board’s 3-2 decision in Browning-Ferris of California, Inc., 362 NLRB No. 186 (August 27, 2015), increasing the likelihood the Board may find two employers to be “joint employers,” and thereby share many collective bargaining responsibilities as well as liability for each other’s violations of the National Labor Relations Act. See “Labor Board Sets New Standard for Determining Joint Employer Status” (August 25, 2015).

Among the circumstances the NLRB in Browning-Ferris said contributed to a joint employer finding were those pertaining to drug and alcohol testing. The contracting firm (Leadpoint) was required by its agreement with Browning-Ferris (BFI), the host employer, to ensure that all employees referred to BFI passed a five-panel urinalysis drug screen or similar test as agreed to in writing with BFI. Leadpoint was not allowed to refer workers who did not pass the test. Furthermore, BFI could request written certification of such test completion. Even after an employee was referred to BFI, Leadpoint was responsible for ensuring the employee remained free from the effects of alcohol and drug use and in condition to perform his job duties for BFI. The drug tests were administered through the Leadpoint HR department.

For more on this aspect of Browning-Ferris, click here.

NLRB’s Camelot: A Less Congenial Spot for Happy Independent Contracting

Trying to keep track of the “tests” that various government agencies use to determine whether an individual is (or is not) an independent contractor?

Don’t ignore the National Labor Relations Board’s latest. It was applied recently in Sisters Camelot, 363 NLRB No. 13 (Sept. 25, 2015).

Whether individuals performing services for an entity are employees, who are protected by the National Labor Relations Act, or independent contractors, who are not, is determined by 11 well-established factors set forth in the Restatement (Second) of Agency § 220 (1958), the NLRB held 2014. They are:

  1. Extent of control by the employer
  2. Whether or not the individual is engaged in a distinct occupation or business
  3. Whether the work is usually done under the direction of the employer or by a specialist without supervision
  4. Skill required in the occupation
  5. Who provides the supplies, tools, and place of work
  6. Length of time for which individual is employed
  7. Method of payment
  8. Whether or not the work is part of the regular business of the employer
  9. Whether or not the parties believe they are creating an independent contractor relationship
  10. Whether the principal is or is not in the business
  11. Whether the evidence tends to show that the individual is, in fact, rendering services as an independent business 

Unfortunately, the Board has provided little guidance on how to analyze the facts relevant to each of these factors. Rather, it has opted for opacity, saying only that the relevance of each factor “will depend upon the factual circumstances of the particular case.”

The Board, therefore, may have ample opportunity to second-guess its administrative law judges’ decisions, emphasizing the factors that support a desired outcome and minimizing those that do not, favoring findings of employee status in many (perhaps most) instances. Which brings us to Sisters Camelot.

There, applying its 11-factor test to reverse its ALJ, the Board concluded the employer improperly treated canvassers as independent contractors. The Board’s conclusions supporting its finding of employee status (and NLRA coverage) were somewhat surprising, at least as applied to four of the more significant factors:

  1. Control:   The Board held the extent of the putative employer’s control supported a finding of employee status. This was true although the canvassers were not required to report to work on any given day or even to let anyone know if they were going to show up to work. That fact, according to the Board, was not determinative. What was determinative, in its view, was the level of control the employer had if a canvasser showed up to work. The employer decided on a pickup and drop-off time, transported canvassers to the locations to be canvassed, and determined which canvassers would cover which location.
  2. Supervision: Canvassers were not subject to supervision while working, yet the Board discounted this by holding, “the nature of the work makes such in-person supervision highly impractical.” The Board rationalized its decision by stating the documentation required of canvassers provided another means of supervision and of assessing performance.
  3. Length of time for which individual is employed: Nothing in the decision addressed the canvassers’ average duration of alleged employment with Sisters’ This appeared to be highly intermittent work: people worked as canvassers when they wanted to earn some extra money. Some worked for a day or two and never worked again.   Yet, because the possibility existed that some canvassers might work for years, the Board found this factor “inconclusive.”
  4. Freedom to work for others: One of the touchstone tests for independent contractor status is an individual’s ability to take on work for other organizations. The canvassers were free to do so, and were even free to solicit the same neighborhoods for other organizations when they were not canvassing for Sisters’ Despite this, the Board held that “the ability to work for multiple employers does not make an individual an independent contractor.”

While the Board’s application of the 11 factors in Sisters Camelot may surprise some, its ultimate conclusion that canvassers were employees covered by the Act is predictable. The Board’s recent decisions underscore that the NLRB is purposefully making it more difficult than ever to create an independent contractor relationship. Therefore, it is more important than ever for employers to evaluate their organizations’ independent contractor agreements and practices carefully in light of the 11 Restatement factors and these decisions.

For a detailed analysis of the Board’s review of all 11 factors in Sisters Camelot, click here.


Teamsters Take Aim at Browning-Ferris Successor While Congress Entertains Legislative Roll Back Efforts

In a previous post, we reported on Browning-Ferris Industries of California Inc., 362 NLRB No. 186 (2015), a landmark National Labor Relations Board decision that established a new “test” for the NLRB to apply when determining joint employer status under the National Labor Relations Act. Browning-Ferris (BFI) operated a waste recycling facility and subcontracted employees from Leadpoint Business Services to sort recyclable items and to perform basic housekeeping functions. The Teamsters filed a petition to represent approximately 240 of the subcontracted employees. A Board-conducted election had already taken place, but the ballots had been impounded pending an NLRB decision on the joint employer issue. Following its decision, the Board counted the ballots. The union won 73-17. Within a month of being certified as bargaining representative of the joint employers’ employees, the Teamsters filed an unfair labor practice charge against BFI’s successor, Republic Services, Inc., claiming the company was refusing to bargain. The unfair labor practice charge is being investigated by an NLRB Regional Director who will decide whether the charge has merit.

Meanwhile, Congress continues to consider legislation aimed at rolling back the Board’s new joint employer standard. The Protecting Local Business Opportunity Act (S.2015/H.3459) was introduced by Senator Lamar Alexander (R-Tenn.) and House Representative John Kline (R-Minn.). The proposed legislation seeks to amend the NLRA by adding a definition of “joint employer” that closely mirrors the Board’s old standard.

The House of Representative’s Education and the Workforce Committee held a hearing on September 29 to consider the bill. Small business owners and a management labor lawyer endorsed the bill’s proposal to overturn the Board’s decision, while two law professors told the subcommittee that Browning-Ferris has been misunderstood or exaggerated. The Senate Health, Education, Labor and Pensions Committee held its own hearing on the new joint employer standard on October 6.

In the meantime, Senator Mike Lee (R-Utah) has introduced a second measure aimed at curtailing the NLRB by challenging its authority. The Protecting American Jobs Act (S. 2084) was introduced in the Senate on September 28 and would transfer prosecutorial and adjudicative authority over labor disputes from the NLRB to federal courts. The bill would leave the Board with only the power to conduct investigations.

Additional developments are anticipated as the Board and Congress continue to react to Browning-Ferris and its effects. Stay tuned for further updates.

NLRB’s New Joint Employer Standard Faces First Legislative Challenge

Two days after returning from a scheduled congressional recess, senior Republican lawmakers introduced the first legislative challenge to the NLRB’s new joint employer standard, which was handed down last month in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015).

The Board’s decision in Browning-Ferris makes a sweeping departure from 30 years of precedent and broadens the definition of a joint employer to include those entities that exercise direct, indirect or even a reserved right to control the employees of another business. The lawmakers stressed the importance of the legislation in a joint press release, which cautioned that the “NLRB’s new joint employer standard would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses.”

The Protecting Local Business Opportunity Act (H.R. 3459, S. 2015), introduced by Chairman of the House Committee on Education and the Workforce Rep. John Kline (R-Minn.) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.), seeks to amend the National Labor Relations Act by defining an “employer” as follows:

Notwithstanding any other provision of this Act, two or more employers may be considered joint employers for purposes of this Act only if each shares and exercises control over essential terms and conditions of employment and such control over these matters is actual, direct, and immediate.

The bills closely track the Board’s previous joint employer standard, which had remained relatively unchanged since 1984. Other efforts supported by the Republican lawmakers to undo recent Board actions include a March, 2015 bill targeted at the Board’s decision in Specialty Healthcare, which split from agency precedent to permit unions to organize “micro” bargaining units, and a legislative challenge aimed at the Board’s “quickie” representation election rule changes, which went into effect on April 14, 2015.

While the proposed legislation is expected to pass the House, and possibly the Senate, it almost certainly will fall to a presidential veto. Despite the setback, the lawmakers are expected to keep up the pressure on the Obama Administration and to challenge what has been touted as the Board’s “pro-union” agenda.

We will keep you apprised of the legislation’s progress.

Fuzzy Math May Be Basis For Labor Secretary’s Claim That Union Workers Earn More, Analysis Asserts

“Join the union, and you’ll make more money!”

It’s a common refrain for unions trying to sell employees on the virtues of union representation. And now, Labor Secretary Thomas Perez has joined the chorus, authoring a blog post entitled, “Stronger Together: Your Voice in the Workplace Matters,” in which he claims that workers represented by unions earn $200 more weekly than non-union workers. He wrote:

“According to data from the Bureau of Labor Statistics, the median weekly earnings for union members last year were $200 a week more than for non-union workers. That’s not pocket change — $200 a week is the difference between paying the bills and worrying about whether the lights will go out.”

However, Diana Furchtgott-Roth of MarketWatch in her September 2, 2015 article, “Opinion: Workers don’t do better in unions,” disputes Secretary Perez’s claim. In brief, she notes the following

  • Fact: 40% of all union workers are government employees. Perez’s data does not separate public and private sector workers. This is significant because “union members are more concentrated in higher-paying” public sector jobs, .
  • Fact: Union workers tend to be older, and thus earn more money as a result of their seniority
  • Fact: More union workers are located in the Northeast where wages are higher to account for the higher cost of living. A worker in Georgia earns less than one in New York, but the cost of living is less there.
  • Fact: With the exception of government workers, jobs in unionized industries are shrinking. Employment in the construction industry, for example, which has a higher percentage of unionized workers, has declined by 13% in the past ten years.
  • Fact: In the professional and business services industry, where there is job growth, union workers earn less—an average of $113/week less.

That union workers earn more than their non-union counterparts may be the “conventional wisdom” in some parts, but it may be a misconception – one that unions don’t hesitate to perpetuate. Organizations whose employees are presented with a union claim that union representation inevitably will increase their “bottom line” may find this analysis helpful in debunking that myth.



NLRB Says Beer Dealer’s Refusal-To-Drug-Test Firing Doesn’t Mix With “Weingarten Rights”

Brewing more trouble for workplace drug testing, the National Labor Relations Board has held a New York beer distributor violated the National Labor Relations Act by denying its driver helper, who reported to work with his clothes “reek[ing] of the smell of marijuana” and with “glassy” and “bloodshot” eyes, and was directed to take a drug test immediately despite requesting representation by his union steward, his right to union representation at an “investigatory interview” (the drug test) about his possible substance abuse. The Board also found the employer had unlawfully discharged the employee for refusing to take the test in the absence of his union steward. Manhattan Beer Distributors, LLC, 362 NLRB No. 192 (August 27, 2015).  For more on this important decision, visit our Drug and Alcohol Testing Law Advisor blog.