The National Labor Relations Board has begun the process to consider rulemaking to establish a standard for determining joint employer status under the National Labor Relations Act, according to the Board’s filing in the Unified Agenda of Federal Regulatory and Deregulatory Actions.
The current standard is set forth in Browning-Ferris Industries, 362 NLRB No. 186 (2015). In that case, the NLRB announced a union-friendly joint employer test under which the Board will find two entities are joint employers where one exercises direct or indirect control over the other’s employees, or where one entity has reserved rights of control over the other’s employees, even if unexercised. The Browning-Ferris standard was reinstated when the NLRB vacated its decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017) on February 26, 2018.
Hy-Brand, which overruled Browning-Ferris and reinstated the former joint employer standard requiring a finding of direct control, was vacated after the Board’s Inspector General released a report stating that Member William Emanuel should have recused himself from participating in the decision. Emanuel’s law firm represented one of the joint employers involved in the Browning-Ferris decision.
Since Hy-Brand was already overruled once, conventional wisdom is the Board, once again, will reverse Browning-Ferris when the opportunity arises. However, to reverse Browning-Ferris,all three Republican Board members (Emanuel, Marvin Kaplan, and Chairman John Ring) likely would need to participate in the decision to form a 3-2 majority. (A 2-2 vote would result in the Browning-Ferris standard remaining in place.)
It appears that the rulemaking proposal, which was prepared at the request of Chairman Ring, is an effort to avoid any future conflict problems and the inability of Senate Republicans to get legislation to overturn Browning-Ferris passed. (Legislation to overturn Browning-Ferris has been filed in Congress, but Senate Republicans have struggled to get the Democratic votes necessary to pass it.) Now, the 3-2 Republican-majority Board is seeking an alternate route around these roadblocks. Next, a Notice of Proposed Rulemaking will be issued, affording the opportunity for public comment. A majority of the five-member Board will need to approve the proposed rule.