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NLRB Changes Rules for Determining Joint Employers
The long-awaited decision of the National Labor Relations Board (NLRB) in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 ( BFI ), was issued on Aug. 27, 2015. The decision set forth new guidelines under which a company could be determined to be a joint employer so that it would be subject to collective bargaining. The franchise community has kept an eye on BFI to determine whether it could divine from that ruling the possible outcome of the NLRB General Counsel's case against McDonalds Corporation, which has also been charged with being a joint employer with its franchisees. The decision in BFI was 50 pages in length, but a strong dissent by the two Republican members of the Board took up 30 of those pages. The majority of the Board found that Browning-Ferris was a joint employer along with Leadpoint Business Services (Leadpoint), a business staffing agency, by employing a new test for determining joint employment that will be applied retroactively.
After requesting comments from the industry, which included the International Franchise Association (IFA) and various franchisors, the NLRB adopted a more expansive standard than currently in effect for determining joint employer status as follows:
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. In evaluating the allocation and exercise of control in the workplace, we shall 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.
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