For nearly 30 years the National Labor Relations Board (\u201cNLRB\u201d or \u201cBoard\u201d) has reasoned that two businesses can only be deemed \u201cjoint employers\u201d \u2013 and thus jointly responsible for purposes of collective bargaining and unfair labor practices \u2013 upon a showing that the companies exercised actual, direct and substantial control over the terms and conditions of employment of the employees in the other entity. Factors such as the right to hire, terminate, discipline, supervise and direct employees were relevant to the level of control assessment, and theoretical, limited or routine control over workplace activities of the other was generally deemed insufficient.<\/p>\n
In a decision that may have sweeping implications for companies that subcontract work through staffing agencies or other third party vendors, the NLRB has\u00a0announced a new standard that will result in many more companies being deemed \u201cjoint employers\u201d of their third-party contractors. The Board\u2019s expanded joint employer standard will also have implications for franchisor\/franchisee, parent\/subsidiary and other corporate relationships.<\/p>\n
The New \u201cDirect or Indirect\u201d Control Standard:<\/u><\/strong> In a significant departure from established precedent, a 3-2 majority in Browning-Ferris dramatically lowered the standard for establishing a \u201cjoint employer\u201d relationship. At issue in the case was whether Browning Ferris Industries was a joint employer with Leadpoint, a staffing services company, in a union representation election among Leadpoint workers who staffed conveyor belts in Browning-Ferris\u2019 plant. The union already represented Browning-Ferris\u2019 employees at the plant.<\/p>\n