Last Friday – the day the Star Wars movie Episode VIII hit theaters and the last working day of National Labor Relations Board Chairman Philip A. Miscimarra’s term – the Board continued its efforts to undo some of the most controversial and problematic decisions rendered by the Obama Board before the Republicans temporarily lose their majority.  As we previously reported, recent days have seen a stream of significant decisions and other actions from the National Labor Relations Board.  Most notably, the Board discarded the much criticized indirect control test for determining joint-employer status adopted in Browning Ferris joint employer test and returned to its traditional joint employer standard; it established a new, more reasonable standard under which the legality of employer policies and handbooks will be assessed which, unlike the former test, actually gives weight to an employer’s legitimate interests in promulgating the rule; and it opened public comment on the expedited election rules and procedures, the first critical step to amending those rules.

Notably, these and the other decisions discussed in this article involve issues which the Board’s new General Counsel identified as being among those subject to mandatory submission to the Division of Advice, i.e, “Cases that involve issues over the last eight years that overruled precedent and involved one or more dissents.”

The Board continued its own reconsideration of cases in which the Obama Board had overruled precedent, often over the dissent of Chairman Miscimarra, on Friday with two more significant decisions:  PCC Structurals, which overturned the “overwhelming community of interest” test that the Board has adopted in Specialty Healthcare, which has been seen as leading to the proliferation of “micro bargaining units,” and Raytheon Network, which reinstated employers’ right to unilaterally implement changes when there is not a collective bargaining agreement in effect, where such changes are consistent with established past practice.  As discussed below, collectively these decisions are beginning to restore balance to labor relations after nearly a decade of pro-union decisions that discarded long standing Board precedents.

PCC Structurals Restores the Traditional Community-of-Interest Standard – Overturns Specialty Healthcare’s “Overwhelming Community of Interest” Test

In 2011, the Board in Specialty Healthcare materially changed the test that it would use to assess how it will address the scope of a unit for a representation election and collective bargaining when a union petitioned for an election in a bargaining unit that the employer argued was too narrowly drawn because it  improperly excluded similarly situated employees who shared a community of interest with the petitioned-for workers.  Rather than evaluating whether it was a “sufficiently distinct” community of interest between the petitioned-for unit and excluded employees, as long-standing precedent required, in Specialty Healthcare, the Board held that a petitioned-for unit would be deemed appropriate unless, as the PCC Structurals decision points out, the employer proved “the next-to impossible burden . . . that ‘employees inside and outside [the] proposed unit share an overwhelming community of interest’ . . . .”  Under the Specialty Healthcare standard, employers contesting a union’s petitioned-for unit had the herculean burden of showing that other employees’ interests “overlap almost completely” with the union’s desired group.

As the majority in PCC Structurals pointed out, Specialty Healthcare afforded “extraordinary deference” to the union’s petitioned-for unit and led to the rise of fractured “micro-bargaining” units that defy well-established industry rules.  For example, under Specialty Healthcare, the Board has approved units limited to individual sales departments within a department  store, “notwithstanding the Board’s longstanding rule that favors storewide units within the retail industry,”  and units of prepress employees that exclude press employees in contravention of “the Board’s ‘traditional’ rule that press and prepress employees should ordinarily be included in the same ‘lithographic unit.’”  In PCC Structurals, the Board observed these results ignored the substantial interests of excluded employees and interfered with their rights under the Act.

To rectify these problematic results and better effectuate the Act’s goal of assuring “employees their fullest freedom in exercising their rights under the Act,” the Board in PCC Structurals overturned Specialty Healthcare and returned to the standard that governed the assessment of petitioned-for units for nearly all of the Act’s history prior to Specialty Healthcare.  Under the reinstated standard, the Board will evaluate whether the excluded employees also share a community of interest with the petitioned-for unit and, if so, will include them in the unit.

Specifically, as it had for decades prior to Specialty Healthcare, the Board will return to the traditional community-of-interest multi-factor test which examines:

whether the employees are organized into separate department; have district skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between job classifications; are functionally integrated with the Employer’s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment and are separately supervised.

As the majority observed, in ensuring the Board examines the interests of all employees (both included and excluded), it “corrects the imbalance created by Specialty Healthcare…”

Raytheon Network Reinstates Employers’ Right To Implement Unilateral Changes Pursuant to Past Practice After the Collective Bargaining Agreement Expires

In 2016, the Board majority in E.I. Du Pont De Nemours held that, after a collective bargaining agreement expires, unilateral changes implemented by an employer pursuant to established past practice were unlawful if the change involved managerial discretion.    Then-member Miscimarra vigorously dissented, arguing that the majority’s decision created an untenable definition of “change” that defies common sense and encompasses any action that involves the slightest managerial discretion, despite being materially indistinguishable in kind or degree from the employer’s customary past actions.

In Raytheon Network, the Board reversed E.I. Du Pont and adopted Chairman Miscimarra’s reasoning in his Du Pont dissent.  The Board majority noted that, under Du Pont, an employer would be found to have made an unlawful unilateral change in violation of Section 8(a)(5) of the Act, even though the employer merely “continues to do precisely what it had done many times previously – for years or even decades…”  The majority held this “fundamentally flawed” position “is inconsistent with Section 8(a)(5), it distorts the long-understood, commonsense understanding of what constitutes a change, and it contradicts well-established Board and court precedent.”  The Board also pointed out that the Du Pont extreme view of “change” was contrary to the guidance of the Supreme Court in NLRB v. Katz, on which the Board’s pre-Du Pont decisions were based. The Board concluded that continuing adherence to the Du Pont change standard could not be reconciled with the Board’s responsibility to foster stable bargaining relationships.  Accordingly, the majority overruled Du Pont and reinstated the rule that an employer may lawfully take unilateral actions “that do not materially vary in kind or degree from what has been customary in the past,” even though such actions may involve some managerial discretion.

With Miscimarra’s Exit, Dismantling The Obama Board’s Legacy Will Likely Stall

The Obama Board frequently broke with longstanding precedent and ushered in new rules that arguably favored labor unions while disregarding the legitimate business concerns of employers.  These decisions were often met with vigorous dissents warning that such decisions would cause unpredictable, unfair, and unsustainable results in labor-management relations.  The most prominent and vocal of these dissenters was Chairman Miscimarra.  Since attaining a Republican majority, the Board has implemented many of the rules and principles articulated in Miscimarra’s dissents, overturning some of the most controversial decisions rendered by the Obama Board and this past week’s decisions have certainly helped cement Chairman Miscimarra’s legacy of pragmatic adherence to the traditional principles of the Act.  However, with the expiration of Chairman Miscimarra’s term on December 16, 2017, the Board returns to 2 Republicans and 2 Obama-era holdover Democrats.  While various names have circulated as possible candidates for the now vacant seat, as of yet the President has not yet sent a name to Congress, nor has he indicated who he plans to nominate.  Thus, at least for now, the recent progress in reexamining and moving away from the Obama Board’s legacy remains on hold, at least at the Board level.  However, given the General Counsel’s recent announcement of issues targeted for submission to the Division of Advice, including all “Cases that involve issues over the last eight years that overruled precedent and involved one or more dissents,” there is every reason to believe that once a new majority is in place, the Board will, as the Jedi say, seek to bring balance to the Act.

It should come as no surprise that recent days have seen a stream of significant decisions and other actions from the National Labor Relations Board as Board Chairman Philip A. Miscimarra’s term moves towards its December 16, 2017 conclusion and as a new majority has recently taken shape with the confirmation of Members Marvin Kaplan and William Emanuel.  Chairman Miscimarra, while he was in a minority of Republican appointees from his confirmation during July 2013 until last month, has clearly and consistently explained why he disagreed with the standard adopted in Lutheran Heritage Village for determining whether a work rule or policy, whether in a handbook or elsewhere would be found to unlawfully interfere with employees’ rights under Section 7 of the National Labor Relations Act to engage concerted action with respect to their terms and conditions of employment as we as  the actions  of the Obama Board in a range of areas, including the 2015 adoption of a much relaxed standard for determining joint-employer status in Browning-Ferris Industries, and his disagreement with the expedited election rules that the Board adopted through amendments to the Board’s election rules.

The Board’s New Standard for Determining Joint Employer Status

In Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co., decided on December 14, 2017, in a 3-2 decision, the Board has discarded the standard adopted in Browning-Ferris, and announced that it was returning to the previous standard and test for determining joint-employer status and returning to its earlier “direct and  immediate control standard.” Under this standard, “A finding of joint-employer status shall once again require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine,’” and once again adopting a test that requires a showing that a putative joint –employer possesses “direct and immediate” control over the terms and conditions of employment of the employees of another employer.

In rejecting Browning-Ferris, the majority returns to a standard based on the common law test for determining whether an employer-employee relationship exists as a predicate to finding a joint-employer relationship.  Under Hy-Brand, a finding of joint-employer will require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”

The majority, consisting of Chairman Miscimarra and Members Kaplan and Emanuel explained why they were rejecting Browning-Ferris:

We think that the Browning-Ferris standard is a distortion of common law as interpreted by the board and the courts, it is contrary to the [National Labor Relations Act,] it is ill-advised as a matter of policy, and its application would prevent the board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.

The Board’s New Standard Governing Workplace Policies

In The Boeing Company, also decided on December 14, 2017, the Board adopted new standards for determining whether “facially neutral workplace rules, policies and employee handbook standards unlawfully interfere with the exercise” of employees rights protected by the NLRA.

In Boeing, the Board establishes the following new test:

when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule.”

Boeing offers assistance to employers and others who wish to evaluate the legality of any particular rule or policy, by creating three categories of rules for this purpose:

Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule.  Examples of Category 1 rules are the no-camera requirement maintained by Boeing, and rules requiring employees to abide by basic standards of civility.  Thus, the Board overruled past cases in which the Board held that employers violated the NLRA by maintaining rules requiring employees to foster “harmonious interactions and relationships” or to maintain basic standards of civility in the workplace.

Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.

Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule.  An example would be a rule that prohibits employees from discussing wages or benefits with one another.

While the Board’s setting of these categories offers guidance, it will remain critical for employers and others to carefully assess each proposed rule and policy since the potential for substantial overlap between the categories will exist.

Equally important will be the application of rules and policies that may be facially lawful but subject to unlawful or inconsistent application.

An Assessment of the 2014 Expedited Election Rules

Because the expedited election rules were adopted through administrative rule making under the Administrative Procedures Act, the Board cannot simply discard or revise the 2015 amendments.

Noting that the 2014 Election Rules were adopted over the dissent of Chairman Miscimarra and then Member Harry Johnson, and the fact that these rules have now been effect for more than two years, on December 14th, the Board, over the dissents of Members Mark Pearce and Lauren McFerren, both of who were appointed by President Obama, published a Request for Information, seeking comment on the following three questions:

  1. Should the 2014 Election Rule be retained without change?
  2. Should the 2014 Election Rule be retained with modifications? If so, what should be modified?
  3. Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Election Regulations? If the Board should make changes to the prior Election Regulations, what should be changed?

In explaining its decision to issue the Request, the Board majority has made clear that it is seeking the views of all interested parties, including labor and management, those in government and the Board’s General Counsel.  It has also made clear that while it is possible that it may engage in rulemaking to further amend the election rules and procedures, it may maintain the 2014 Election Rules without change, noting that “the Board merely poses three questions, two of which contemplate the possible retention of the 2014 Election Rule.”

The year-end episode of Employment Law This Week  looks back at the biggest employment, workforce, and management issues in 2016.

Our colleague Laura Monaco discusses the National Labor Relations Board’s decision in Miller & Anderson, which expanded the already-relaxed joint-employer standard adopted by the Board in its August 2015 decision in Browning Ferris Industries

The show also reviews the Trustees of Columbia University decision on collective bargaining and union organizing.  

Watch the segment below and read Epstein Becker Green’s recent Take 5 newsletter, “Top Five Employment, Labor & Workforce Management Issues of 2016.”

Hoagie Sandwich and ChipsThis past week, Doctor’s Associates Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement (the “Agreement”) with the US Department of Labor’s (DOL) Wage and Hour Division “as part of [Subway’s] broader efforts to make its franchised restaurants and overall business operations socially responsible,” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.

While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisee across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers and other federal and state agencies such as the National Labor Relations Board (NLRB or Board), DOL’s own Occupational Safety and Health Administration (OSHA) and the EEOC to treat franchisors as joint employers with their franchisees.

What Is in the Agreement?

While on its face this may sound like a good idea and one that should not be controversial, in reality by entering into this Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees, to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that SUBWAY offers as a service to its franchisees,” and although the Agreement is notable for its silence on the question of whether the DOL considers Subway to be a joint employer with its franchisees, the Agreement is likely to be cited, by unions, plaintiffs’ lawyers and other government agencies such as the NLRB as evidence of the fact that Subway as franchisor possesses the ability, whether exercised or not, to directly or indirectly affect the terms and conditions of employment of its franchisees’ employees, and as such should be found to be a joint employer with them.

Notably, while the Agreement does not specifically address the exercise of any such authority on a day to day basis, it does suggest an ongoing monitoring, investigation and compliance role in franchisee operations and employment practices by Subway and a commitment by Subway as franchisor to take action and provide data to the DOL concerning Fair Labor Standards Act compliance.  In the past, courts have in reliance on similar factors held that a franchisor could be liable with its franchisees for overtime, minimum wage and similar wage and hour violations.

Of particular interest to many will be the final section of the Agreement, titled “Emphasizing consequences for FLSA noncompliance.”  This section not only notes that “SUBWAY requires franchisees to comply with all applicable laws, including the FLSA, as part of its franchise agreement,” but also what action it may take where it finds a franchisee has a “history of FLSA violations”:

SUBWAY may exercise its business judgment to terminate an existing franchise, deny a franchisee the opportunity to purchase additional franchises, or otherwise discipline a franchisee based on a franchisee’s history of FLSA violations.

Will Subway’s “Voluntary Agreement” with the DOL Have Any Impact Beyond Wage and Hour Matters?

As we approach the one year anniversary of the NLRB’s decision in Browning Ferris Industries, it is abundantly clear that not only the Board itself but unions and others seeking to represent and act on behalf of employees are continuing to push the boundaries and expand the application of Browning Ferris.  In fact the Board has been asked to find that policies and standards such as those evidencing a business’s commitment to “socially responsible” employment practices, the very phrase used in the Subway-DOL Agreement, should be evidence of indirect control sufficient to support a finding of a joint employer relationship between a business and its suppliers.

Moreover, the NLRB and unions such as UNITE HERE and the Service Employees International Union continue to aggressively pursue their argument that the terms of a franchise agreement and a franchisor’s efforts to ensure that its franchisees, who conduct business under its brand, can also be sufficient to support a finding of joint employer status.  No doubt they will also point to the Subway Agreement with the DOL as also being evidence of such direct or indirect control affecting franchisees’ employees’ terms and conditions.

What Should Employers Do Now?

Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.

Equally critical employers should carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.

Employment Law This Week has released bonus footage from its interview with Steven Swirsky, co-founder of this blog and Member of the Firm at Epstein Becker Green.

In its recent Browning-Ferris decision, the NLRB loosened the standard for determining who qualifies as a joint employer. In this video, Mr. Swirsky elaborates on his comments featured as the top story in Employment Law This Week, Episode 1 (Oct. 19, 2015).

 

Watch on YouTube or Vimeo or Download in MP4 or WMV format.

The top story on Employment Law This Week – Epstein Becker Green’s new video program – is the NLRB’s recent Browning-Ferris decision, where it loosened the standards for determining who qualifies as a joint employer. It’s a critical ruling that affects many different industries and employers and the episode sums it up very succinctly.

The episode features a soundbite from this blog’s co-founder Steven Swirsky, who has written extensively on the decision. See below to view the episode or read more about this important ruling and its implications.

The National Labor Relations Board (“NLRB” or “Board”) has issued its long-anticipated  decision in Browning-Ferris Industries, 362 NLRB No. 186 (pdf), establishing a new test for determining joint-employer status under the National Labor Relations Act (“NLRA” or the “Act”).  Because this revised standard will resonate with businesses relying on contractors and staffing firms throughout the economy and across industry lines, employers should be wary of its potential impact upon relationships with service providers that are supportive of, or critical to, their enterprise.

By fashioning a new standard in Browning-Ferris, the Board springs open new questions of which legally distinct entities will bear responsibility in NLRB cases addressing union recognition and bargaining obligations, as well as for any unfair labor practices that may follow.  Given the Board’s lead in fashioning a new standard, described as based on common law principles, it is likely to be relevant as well to other agencies, such as the Equal Employment Opportunity Commission and Department of Labor.

The majority opinion in this 3-2 decision makes clear that its objectives are far reaching: to address “the diversity of work­place arrangements in today’s economy,” including the increase in “[t]he procurement of employees through staffing and subcontracting arrangements, or contingent employment,” and fulfill a “primary function and responsibility.”

A New Standard for a Different Economy

Under the new standard enunciated by the majority, “[t]he 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.” Browning-Ferris jettisons the long standing requirement that not only must a party have the means to influence such matters, but it must also have exercised that right in a meaningful way.  If the decision is upheld and followed, no longer will the Board need to find that an employer retains and exercises direct control over another employer’s employees to be liable as a joint employer of those employees.

In the decision and press release, the Board suggests that “the current economic landscape”, which includes some 2.87 million people employed by temporary agencies, warrants a “refined” standard for assessing joint-employer status. As the majority puts it: “If the current joint-employer standard is narrower than statutorily necessary, and if joint-employment arrangements are increasing, the risk is increased that the Board is failing what the Supreme Court has described as the Board’s ‘responsibility to adapt the Act to the changing patterns of industrial life.’”

What Is the New Test for Finding Joint Employer?

So what exactly is changed? Previously, an employer had to exercise direct and immediate control over the terms and conditions of employment to be found to be a joint-employer. Under the new standard, what matters is whether the purported joint-employer possesses the authority to control the terms and conditions of employment, either directly or indirectly. In other words, the actual or potential ability to exercise control, regardless of whether the company has in fact exercised such authority, is the focus of the Board’s inquiry.  As the Board puts it, “reserved authority to control terms and conditions of employment, even if not exercised, is clearly relevant to the joint-employment inquiry.” (emphasis added).

The Board’s decision also extends joint-employer status to employers that only exercise a degree of indirect control over the work performed by the employees of another. By way of example, in support of its holding that Browning-Ferris Industries (“BFI”) was a joint-employer of the employees of its contractor, Leadpoint Inc., a supplier of temporary labor, the Board emphasized that BFI had “communicated precise directives regarding employee work performance” to Leadpoint supervisors.

Why This Matters

As former NLRB Chair Wilma Liebman told Noam Scheiber of The New York Times, the Board’s decision changes the critical fact of which company is required to negotiate when employees unionize: “This is about, if employees decide they want to bargain collectively, who can be required to come to the bargaining table to have negotiations that are meaningful,”

One significant indicator of how broadly the Browning-Ferris decision will be applied may be seen when the decisions issue in the pending unfair labor practice charges in which McDonald’s is alleged to be a joint-employer of the employees of various franchisees. While the full import of Browning-Ferris may unfold over years of administrative litigation and court review, we know that the obvious (and intended) effect of the decision is to permit the Board to find joint-employer status where it did not previously exist. Indeed, the Board majority notes that extending joint-employer status is necessary to “encompass the full range of employment relationships wherein meaningful collective bargaining is … possible.” Notwithstanding the arrangements employers and contractors have made in years past to guard against joint-employer exposure, unions will be at the ready with unfair labor practice charges and representation petitions as vehicles for the Board to apply its new standard and examine or reexamine relationships forged before the pronouncements of Browning-Ferris. Thus, employers should anticipate a role in newly filed proceedings alleging joint-employer status – even as they contemplate reforming or redefining terms by which they engage with contractors and other providers of services supportive of their business.

Especially troubling is the prospect that the Board, in its zeal to create new applications for its joint-employer criteria, will ignore existing facts showing no actual exercise of control by one employer over employee relations of another, and instead look for control that potentially could be exercised in an ordinary arm’s length business relationship.

Given these circumstances, even those employers who do not exercise any direct or indirect control over the employees of their contractors should review carefully the terms of such arrangements, keeping in mind the Board’s stated intention of expanding joint-employer status.

What to Do Now

It is not an exaggeration to say that the new standard for determining joint-employer status will impact employers in almost every industry across the country.  As a first step, employers will want to closely examine their relationships with those who provide them with temporaries and other contingent workers, and their contracts and relationships with those other businesses that provide integral services and support, to assess whether there is a vulnerability to findings of joint-employer status.

Steven M. Swirsky

The National Labor Relations Board (NLRB or Board) invited interested parties to submit amicus briefs in Miller & Anderson, Inc. in connection with the Board’s reexamination of critical issues affecting the ability of unions to organize employees employed by temporary and staffing agencies (“temporary employees”) in the same bargaining units as employees of an employer that supplements its direct workforce with temporary employees.

Elections Involving Joint-Employers

Under the existing law, the Board will only conduct an election and certify a unit that includes employees of joint employers if both of the joint employers agree to such an arrangement.  The Board’s grant of the petitioning union’s request for review of a regional director’s dismissal of petition for an election because one of the joint employers did not agree, appears to telegraph the Board’s intention to abandon that requirement.

Easing the Test for Finding a Joint-Employer Relationship

The NLRB has previously suggested when it invited amicus briefs in imminently in Browning-Ferris that it is about to adopt a new test, based on what it calls “economic realities,” for deciding whether a business is a joint employer with another entity such as a temporary agency or employee leasing service, of the personnel that the agency supplies to work for its client.

More Elections and Unions Representing Temps

If it does so, and then decides in Miller & Associates to create an easier pathway for temporary employees, part-time employees and other contingent workers” to obtain union representation, and be included in bargaining units alongside “regular employees” employed by the principal employer, could radically change the landscape and lead to organizing and bargaining over terms and conditions for temporaries and other contingent workers.  The bargaining obligation would apply not only to the staffing agency that writes a temporary worker’s paycheck, but also to the temporary agency’s client for whom the temporary worker does work.

Under the Board’s 2014 decision in Oakwood Care Center a bargaining unit composed of both “solely employed employees” and jointly-employed employees would only be found to be an appropriate unit for bargaining and the Board would only direct an election in a unit of jointly and solely employed employees if both of the employers (i.e. the principal employer and the temporary or staffing agency supplying personnel to work with the principal employer’s employees) consented to such an arrangement.  Not surprisingly, few, if any, employers agreed to this.

Why Is the Board Doing This Now?

What the Board has indicated in its July 6, 2015 Notice and Invitation to File Briefs is that it is, at a minimum, looking at abandoning the requirement of consent of both employers and returning to the legal standards that preceded Oakwood, which standard was adopted by the Board in 2000, during the Clinton Administration in M.B. Sturgis which had permitted the Board to direct an election in a unit included both solely employed and jointly employed employees without the need for the consent of the two employers.

The fact that the Board has now, after three years, granted the union’s 2012 request for review of a Regional Director’s decision in Miller & Anderson stating that the union’s appeal of the dismissal of its election petition  “raises substantial issues warranting review with respect to the applicability of Oakwood Care Center,” strongly suggests that the Board intends to eliminate the requirement that when a union seeks an election in a unit including  employees the Board finds to be employed by joint-employers, that both employers must consent for an election to take place.

What To Expect

Given the expectation that the Board will shortly announce a much relaxed standard for finding employers to be joint-employers, this is not surprising.  However, what it also likely presages is a continuation of the union campaigns, such as those in the realm of franchisor-franchisee relationships in fast food and elsewhere and the Board’s movement towards more findings of joint employer status.

Following the NLRB’s announcement on July 29th of its position that McDonald’s and its franchisees are joint employers, commentators across the spectrum have been opining about this actually means for employers, unions and workers.

This week the AFL-CIO weighed in with its opinions in a post on its blog AFL-CIO NOW.  After recounting the background of the developments, in section called “What’s the Big Picture?” the author points out how organized labor intends to take advantage of the Board’s anticipated broadening of the standards for finding joint employer status:

“Even though this story has a long way to go, this is “pretty significant,” says AFL-CIO Legal Counsel Sarah Fox. What makes this case so interesting is that the joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other practices companies use to avoid directly employing their workers, such as subcontracting, outsourcing and using temporary employment agencies. “Companies are increasingly using these kinds of arrangement to distance themselves from their workers and shield themselves from liability as employers,” says Fox. “These are the devices they use so that they can get the benefit of the work the employees do, but say ‘I’m not responsible’ for unfair labor practices, health and safety violations, paying proper employment taxes or complying with other legal responsibilities of an employer.”

The notion of the joint employer doctrine is an important concept for holding employers responsible, even if there’s a third party involved, when they are effectively exerting control over wages and working conditions.

As we have predicted, big labor and the NLRB both see these developments, under the rubric of the “economic realities” theory argued by the Board’s General Counsel in its brief to the Board in Browning-Ferris as calling for a new test for determining joint employer status – one which the AFL-CIO sees as allowing unions and workers to go after the companies that contract with other employers, through subcontracting, outsourcing and using temporary employment agencies,” in an effort to hold the customer responsible for its suppliers’ employment practices.

Expect to see these theories raised with ever increasing frequency in a broadening circle of relationships.