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New NLRB Test for Joint-Employer Status in Labor Contracts May Leave You On the Hook

August 27, 2015

By Michael J. Wietrzychowski

Today, in a split decision, the National Labor Relations Board promulgated a new test that will make it easier for employees to establish joint-employer status in labor contracting arrangements.   Under the “restated” legal standard for joint-employer status, the Board “may find that two or more entities are joint em­ployers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  The Board went on to say that “in evaluating the allocation and exercise of control in the workplace, we will consider the various ways in which joint employers may “share” control over terms and conditions of em­ployment or “codetermine” them, as the Board and the courts have done in the past.”

Under the Board’s more liberal test, joint employer status will be found where the employers share or codetermine “those matters governing the essential terms and conditions of employment.”  Such essential terms and conditions include hiring, firing, discipline, supervision, direction of work and hours, and the determination of wages.

The likely impact of this decision will be that companies believing they were insulated from union organizing campaigns and/or unfair labor practice charges aimed at their labor contractors could now be jointly on the hook.

The Decision Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, and FPR-II, LLC, d/b/a Leadpoint Business Services, and Sanitary Truck Drivers and Helpers Local 350, Interna­tional Brotherhood of Teamsters, Petitioner. Case 32–RC 109684 can be found at http://apps.nlrb.gov/link/document.aspx/09031d4581d99106

For more information regarding this or other labor and employment issues, please contact Michael J. Wietrzychowski, Co-Chair of Schnader’s Labor and Employment Practices Group.   

The materials posted on Schnader.com and SchnaderWorks.com are prepared for informational purposes only and should not be considered as providing legal advice or creating an attorney-client relationship. Please see our disclaimer page for a full explanation.

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