A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit, in a split decision, ruled recently in the closely-watched case of Browning-Ferris Industries of California, Inc. v. National Labor Relations Board that “both an employer’s right to control and its indirect control over employees’ terms and conditions of employment” (emphasis ours) can be considered in determining whether an entity is a joint employer for purposes of the National Labor Relations Act (NLRA).
The decision thus endorses the controversial joint employer test set out by the Obama-era National Labor Relations Board (NLRB or Board) in a 2015 ruling, although with some significant caveats. In its 2015 ruling, the Board determined that even reserved authority or “indirect control” may be enough to establish a joint employer relationship, thus abandoning the traditional joint employer test that the Board had been applying for more than three decades.
While the D.C. Circuit’s panel majority agreed that indirect control can be considered, it sent the case back to the NLRB to better articulate what factors would be considered evidence of direct or indirect control, and which factors are simply evidence of “ground rules” between two businesses in the administration of a contract.
From a practical standpoint, the D.C. Circuit’s ruling puts the focus directly back on a proposed rule being considered by the current NLRB to reinstate the traditional joint employer test.
A copy of the D.C. Circuit’s decision in Browning-Ferris Industries of California, Inc. v. National Labor Relations Board is available here.
Members of the Center for Workplace Compliance (CWC) can read more here.