NLRB Vacates Joint-Employer Decision

On February 26, 2018, the National Labor Relations Board (NLRB) issued an Order vacating its recent decision which overturned the broad standard applied in determining joint employment.

As we previously reported, on December 14, 2017, in Hy-Brand Industrial Contractors and Brandt Construction Co., the NLRB overruled the definition of joint employer developed in the NLRB’s 2015 ruling of Browning-Ferris Industries. In Hy-Brand, the NLRB applied the direct control test, as opposed to the Browning-Ferris indirect control test, to determine whether entities shared or co-determined matters governing terms and conditions of employment.

After the issuance of the Hy-Brand decision, the NLRB found there to be a violation of ethical standards in light of the determination of the “Board’s Designated Agency Ethics Official that Member Emanuel is, and should have been, disqualified from participating in that proceeding.” As a result, the NLRB vacated the Hy-Brand decision, thereby reinstating the Browning-Ferris indirect control test for defining a joint employer.

The expansive Browning-Ferris indirect control test for determining joint employment is once again the applicable standard. Under Browning-Ferris, if an employer retains the right to control another employer’s employees—regardless of whether it actually exercises that control—such control is sufficient to establish a joint-employer relationship over those employees it has retained the right to control.