The Trump Administration has just initiated a step to shield major companies from challenges from employees who are working for a franchise. What was considered as “join employment” under an Obama-Era ruling by the National Labor Relations Board (NLRB) has been reversed. The test of indirect control or unexercised control over a worker will no longer be valid to determine the existence of an employer-employee relationship.
In a 3-2 decision, the National Labor Relations Board today overruled the Board’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“Browning-Ferris”), and returned to the pre–Browning Ferris standard that governed joint-employer liability.
“In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately(rather than indirectly) in a manner that is not limited and routine. Accordingly, under the pre–Browning Ferris standard restored today, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship. The Board majority concluded that the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.”
While most jurisdictions follow the “Right to Control Test” or the “Nature of the Work Test” to determine whether an employee-employer relationship exists for workers’ compensation purposes. The NLRB’s decision will make it, even more, difficulty to deem major corporations as an employer or even a joint employer of the employee.
Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., as a single employer and/or joint employers and Dakota Upshaw and David Newcomb and Ron Senteras and Austin Hovendon and Nicole Pinnick. Cases 25–CA– 163189, 25–CA–163208, 25–CA–163297, 25–CA– 163317, 25–CA–163373, 25–CA–163376, 25–CA– 163398, 25–CA–163414, 25–CA–164941, and 25– CA–164945 December 14, 2017 DECISION AND ORDER
Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thomson-Reuters).