What to Know About the NLRB Decision in Browning-Ferris Industries

Last Thursday, the National Labor Relations Board (“NLRB”) issued its decision in Browning-Ferris Industries of California, which for many employers will have rather dramatic consequences.  Browning-Ferris involved a subcontractor, Leadpoint Business Services, who provided labor for the Browning-Ferris recycling facility.  In finding that the two companies were joint-employers, the NLRB set a two-prong standard – two (or more) companies will be deemed to be joint-employers if: 1) they are both “employers” within the meaning of the common law; and 2) they share or “codetermine” those matters governing the essential terms and conditions of employment. In Browning-Ferris, the NLRB found that the two companies shared or codetermined decisions involving: hiring, disciplining and terminating, wages and benefits, scheduling and hours, work processes, training and safety, and certain other terms and conditions of employment.  In what can be seen as a significant departure from long-standing precedent, the NLRB ruled that it was not necessary that Browning-Ferris actually exercised control over some or more of these prerogatives; rather, it was sufficient that the company possessed that power.

What all this means to employers – especially those in the construction industry whose common practice is to use subcontractors – remains to be seen as cases develop.  At a minimum, if joint-employment exists, both (or all) employers could be jointly liable for any and all unfair labor practices committed by any one company.  Whether the NLRB’s approach will be followed by agencies/courts enforcing other employer-employee laws (Equal Employment Opportunity, Americans with Disabilities Act, Fair Labor Standards Act, etc.) also remains to be seen.

For more information regarding the decision and its impact on employers, please contact Philip S. Mortensen.