Hunton Employment & Labor Perspectives

The National Labor Relations Board (Board) announced on June 21, 2022, that it intends to engage in rulemaking with respect to several subjects. One of those which was revealed to be a subject of rulemaking was joint-employer status under the National Labor Relations Act (Act).

On December 13, 2021, the Massachusetts Supreme Judicial Court (“SJC”) issued its long-awaited decision determining that the Massachusetts Independent Contractor Statute, G.L. c. 149, § 148B (“Independent Contractor Statute”), which establishes the three-pronged “ABC” test used to classify workers as independent contractors or employees – and provides for a rebuttable presumption that workers are employees unless the purported employer proves otherwise – is not the applicable standard to determine whether an entity is a joint employer.

On July 29, 2021, the U.S. Department of Labor filed a final rule rescinding the Trump-era “Joint Employer Status Under the Fair Labor Standards Act” rule (29 CFR part 791), which went into effect on March 16, 2020.

Last month, the United States District Court for the Southern District of New York invalidated portions of the Department of Labor’s Final Rule on joint employment, holding that parts of the Final Rule conflicted with the statutory language of the FLSA and chiding the DOL for failing to adequately explain why the Final Rule departed from the DOL’s own prior interpretations.

The Department of Labor (“DOL”) released guidance Tuesday regarding the implementation of the Families First Coronavirus Response Act, including details on how employers can determine whether they are covered by the Act.

500 Employee Threshold

One of the most common questions among employers regarding the Families First Act, which Congress passed last week to provide up to 12 weeks of paid leave for coronavirus-related reasons, involved how to count employees towards the 500 employee threshold for coverage under the law.  If an employer has 500 or more employees, then it is not covered by the law.  The DOL provided three key pieces of guidance to help employers determine whether they are covered.

On February 26, 2020, the National Labor Relations Board (NLRB) finalized its rule governing joint employer status under the National Labor Relations Act.

The final rule generally restores the “direct and immediate control” standard that the NLRB applied for decades prior to the 2015 Browning-Ferris decision, but provides additional guidance.

The last few weeks of a National Labor Relations Board Member’s term can be a busy time.  This is especially true when a Member’s imminent departure will leave the Board without any Members from the minority political party.  The Board historically has avoided major shifts in precedent without the participation of both parties.

Last month was no different.  As the clock wound down on Democrat Lauren McFerran’s term this December, the Board issued a flurry of significant rules and opinions that pare back many of the most anti-employer precedents set during the Obama-era.  Issuing these rulings prior to Member McFerran’s departure allowed the Board to include her dissenting views in most cases.  But ultimately, the Republican-majority prevailed–resulting in good news for employers going forward on multiple fronts.  We summarize the Board’s “December to Remember” below.

The Department of Labor earlier this month proposed employer-friendly amendments to its rules regarding joint employer liability under the Fair Labor Standards Act.

In its Notice of Proposed Rulemaking, the DOL proposed the adoption of a four-factor test to assess joint employer status under the FLSA.  The test would consider an employer’s actual exercise of significant control over the terms and conditions of an employee’s work, rather than attenuated control or contractually reserved control that goes unexercised.

The National Labor Relations Board’s current joint employer standard received a mixed review from a federal circuit court late last month, providing some guidance on how courts may evaluate the Board’s ongoing rulemaking efforts.

Recently, the NLRB created significant uncertainty as to the joint employer test under the NLRA when it vacated a December 2017 decision that resurrected the standard that existed prior to 2015.  Such a standard determines the existence of a joint employer relationship by assessing whether one entity has “actually exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control)” and the control is “’direct and immediate’ (rather than indirect)” and exercised in a manner that is not “limited and routine.”

When a franchisor provides a California franchisee with detailed instructions about how to operate the franchise business, but allows the franchisee to manage its own workforce, can the franchisor be held liable for the franchisee’s wage and hour violations?  The California Court of Appeals found the answer to be no under the facts in Curry v. Equilon Enterprises, LLC, 2018 WL 1959472 (Cal. Ct. App. Apr. 26, 2018).  There, the Court of Appeals concluded Equilon Enterprises, LLC, doing business as Shell Oil Products US (“Shell”), was not liable for the alleged wage and hour violations of the company that operated its Shell-branded gas stations throughout California.

On April 16, newly confirmed member John Ring was sworn in as the fifth member and Chairman of the National Labor Relations Board, establishing a Republican-controlled Board.   While all has been relatively quiet with regard to rulings from the Board,  we will likely see a rise in activity now that the NLRB (with a  newly-minted majority) is poised to roll back some of the Obama-era rulings.

The National Labor Relations Board (the “NLRB”) and McDonald’s Corp. have reached a settlement agreement in the long-running employment retaliation case brought against McDonald’s that hinges on whether McDonald's Corp., as a franchisor, has enough control over its franchisees to be considered a "joint employer" of the franchisees’ employees.  The case stems from allegations that McDonald’s unlawfully retaliated against franchisee workers who joined the “Fight for $15” movement.  In bringing this case against McDonald’s, the NLRB has argued that even having only “indirect control” over a worker is enough for a franchisor like McDonald’s to be held liable for the employment practices of its franchisees.   The NLRB’s case against McDonald’s was bolstered by the Board’s 2015 Browning-Ferris decision, which departed from decades of legal precedent in holding that entities who merely possessed—as opposed to directly and immediately exercised—control over workers could be deemed joint employers for purposes of assessing liability under the National Labor Relations Act.

The National Labor Relations Board continues to undo its actions overruling the joint employer test of Browning-Ferris Industries, 362 NLRB No. 186 (2015).  Earlier this week the Board vacated its decision in Hy-Brand Industries, the case which had overruled Browning-Ferris.

Shortly after the original Hy-Brand decision, the Board had asked the U.S. Court of Appeals for the District of Columbia Circuit to remand the Browning-Ferris case to the Board.  At the time, the Browning-Ferris case was pending before the court of appeals on the Board’s petition for enforcement and Browning-Ferris’s petition for review, and had been fully briefed and argued.

We previously informed you of the National Labor Relations Board’s decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (2017), in which the Board  overruled the controversial joint employer test which it had announced in Browning-Ferris Industries, 362 NLRB No. 186 (2015).

On February 26, 2018, the Board entered an order vacating the Hy-Brand decision, 366 NLRB No. 26 (2018).  It did so in light of a determination by the Board’s Designated Agency Ethics Official, that Board Member William Emanuel “is, and should have been ...

The National Labor Relations Board issued a much-anticipated decision on Thursday, overruling its controversial 2015 Browning-Ferris decision that unions and employees argued drastically expanded the definition and scope of the Board’s joint-employer doctrine.  In Browning-Ferris, the Board departed from decades of precedent and held that entities who merely possessed—as opposed to directly and immediately exercised—control over workers would be deemed joint employers for purposes of assessing liability under the National Labor Relations Act.  The Board used the Browning-Ferris decision to expand its reach under the joint-employer doctrine to include, for example, companies that relied on staffing agencies and in some cases, parent companies that did not exercise immediate or direct control over a subsidiary’s workers, but had the potential authority to affect certain terms and conditions of employment.  The Browning-Ferris decision faced heavy criticism from employers as well as an appeal of the decision itself to the D.C. Circuit Court of Appeals.

In a press release issued this morning, the Department of Labor has announced that it is withdrawing two administrative interpretations issued by the Department of Labor under the Obama administration in 2015 and 2016 relating to misclassification of independent contractors and joint employment. These two administrative interpretations sought to expand the definition of employee, thereby increasing the possibility of misclassification cases, and, as some argued, expanding the concept of joint employer under the Fair Labor Standards Act.  While this is a welcomed ...

At the request of the U. S. Court of Appeals for the Second Circuit, the New York Court of Appeals recently answered several questions regarding liability under the New York Human Rights Law Section 296(15)—which prohibits denying employment on the basis of criminal convictions when doing so violates New York Correction Law Article 23-A—and Section 296(6)—which prohibits aiding and abetting such discrimination.

Published in Law360

Much has been written about the National Labor Relations Board’s controversial Browning-Ferris decision that significantly expanded the scope of joint employer liability under the National Labor Relations Act. But virtually no attention has been given to the Fourth Circuit’s recent panel decision in Salinas v. Commercial Interiors, Inc., which creates an altogether new and incredibly broad joint employment standard under the Fair Labor Standards Act that makes the NLRB’s Browning-Ferris joint employment standard seem temperate at best.

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On March 9, 2017, the United States Circuit Court for the District of Columbia heard oral argument in the case entitled Browning-Ferris Industries of California, Inc., d/b/a/ Browning-Ferris Newby Island Recyclery v. National Labor Relations Board,  Nos. 16-1028, 16-1063 and 16-1064.  (Our prior blogs about this case can be found here.) This appeal challenges the National Labor Relations Board’s (NLRB) new and imprecise standard for determining whether companies are “joint employers” for purposes of the National Labor Relations Act. The new standard, first issued in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015), abandons consideration of a company’s direct and immediate control over employees in favor of a fact-specific approach that focuses more on “reserved” or “indirect” control.

Published in Law360

The National Labor Relations Board has an 80-plus year history of administering federal labor law and regulating labor-management relations in the United States. Formed in 1935 by the passage of the original Wagner Act, the board’s primary obligations are to oversee the formation of collective bargaining units, to investigate and prosecute unfair labor practices, and to establish legal precedent through regulations and binding case precedents. In carrying out its responsibilities, the board is generally expected to act as a neutral arbiter of facts and ...

Much has been written about the National Labor Relations Board’s controversial Browning-Ferris decision that significantly expanded the scope of joint employer liability under the National Labor Relations Act. But virtually no attention has been given to the Fourth Circuit Court of Appeals’ recent panel decision in Salinas v. Commercial Interiors, Inc., No. 15-1915 (4th Cir. 2017), which creates an altogether new and incredibly broad joint employment standard under the Fair Labor Standards Act that makes the NLRB’s Browning-Ferris joint employment standard seem ...

On March 9, 2017, a federal appeals court in Washington, DC will hear argument in a challenge to the National Labor Relations Board’s controversial standard, announced in August 2015, for finding two businesses to be joint employers, and thus responsible for each other’s legal liabilities on the labor front.  The labor community is keeping a close eye on the case.  If the NLRB’s standard is upheld, businesses across the country will face the prospect of sharing labor and employment risk with their subcontractors, supply chain partners, and maybe even their franchisees.

Originally published by Construction Business Owner

By now, the employer community is well aware of the wide-ranging implications of Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186 (2015) (Browning-Ferris)—a decision that upended decades of National Labor Relations Board (NLRB) precedent and dramatically expanded the definition of “joint employer” under the National Labor Relations Act (NLRA). On August 16, 2016, in Retro Environmental, Inc./Green JobWorks, LLC , 364 N.L.R.B. No. 70, 2016 WL 4376615 (August 16, 2016) ( Retro), the NLRB applied ...

In a brief filed on September 7, 2016 (“NLRB Brief”), the National Labor Relations Board (“NLRB” or “the Board”) urged the United States Court of Appeals for the District of Columbia Circuit to uphold its new “joint employer” standard, set forth in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015). Through this new standard, the Board now seeks to impose collective bargaining and other NLRA obligations on companies that may indirectly control certain conditions of employment, or that merely reserve (but do not exercise) such control.  Casting aside the more precise “direct and immediate control” standard it explicitly adopted in 1984, the Board in Browning-Ferris opted instead to analyze joint control issues on a fact-specific, case-by-case basis, with a greater focus on reserved and indirect control.  The case on appeal is entitled Browning-Ferris Industries of California, Inc., d/b/a/ Browning-Ferris Newby Island Recyclery v. National Labor Relations Board,  Nos. 16-1028, 16-1063 and 16-1064.

Earlier this week, the NLRB issued yet another troubling decision in the joint employer space, a world the Board already turned upside-down last summer with its landmark Browning Ferris ruling. In Miller Anderson, the Board overturned Bush-era precedent and held that a union seeking to represent employees in bargaining units that combine both solely and jointly employed employees is no longer required to obtain the consent of the employers, provided the proposed bargaining unit is appropriate under “traditional” Board precedent. Under the prior rule established in the Board’s 2004 Oakwood Care decision, the Board would not allow employees from nominally different employers to form a single bargaining unit without consent, because employers who join a multi-employer bargaining unit must all consent to their inclusion (a sound policy given the host of practical and legal variables that can arise when separate employers agree to bargain together).

A concerned business community has closely followed the NLRB’s shifting views on the concept of “joint employers” - separate companies that are deemed to be so interconnected that they should be treated as one for purposes of labor relations activity and unfair labor practice liability. In August of last year, the NLRB decision in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015), put into place a broad new test that dramatically expands the definition of “joint employer.” Now, an entity will be found to be a joint employer if it exercises only indirect control over the employment terms and conditions of another company’s employees. Indeed, joint employer status can be established if a company simply possesses, but never exercises, the ability to control such terms.

New York Attorney General Eric T. Schneiderman announced yesterday that he has filed a “wage theft” lawsuit against Domino’s Pizza Inc., and several of its New York area franchisees. The case is particularly notable in that Schneiderman is pursuing a joint employer liability theory, seeking to hold Domino’s liable for the alleged wage payment violations of its franchisees. This is the first time Schneiderman has pursued such a claim in a wage payment case, and the lawsuit potentially opens a new front in federal and state enforcement agency attempts to expand the definition of what it means to be a joint-employer.

We have written on several occasions in this space about the NLRB’s controversial new joint employer standard and the damaging impact it may have on business-to-business relationships in the United States.  This morning, Labor & Employment partner Kurt Larkin testified before the U.S. House of Representatives’ Small Business Subcommittee on Investigations, Oversight and Regulations in a hearing on the negative effects the new standard may have on small business.  The House is currently considering an amendment to the National Labor Relations Act that would return the joint ...

On January 20, 2016, the administrator of the Department of Labor’s Wage and Hour Division (WHD), David Weil, issued an “Administrator’s Interpretation” (AI) regarding the agency’s interpretation of joint employment under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The new AI purports to clarify the WHD’s position that joint employment under these statutes “should be defined expansively.” When considered alongside the National Labor Relations Board’s (NLRB or the Board) controversial ...

Hunton & Williams is pleased to bring together industry experts in technology and procurement to host our next IT/Procurement Leadership Forum in Richmond. Join us as we discuss some of the most pressing legal and business issues facing customers in the technology and procurement space.

This forum will provide guidance on a number of key topics, including autonomics and robotic process automation, the legal implications of the National Labor Relations Board’s new joint employer decision, and software audits and IT contracting best practices. These forums are designed to ...

As we have reported in this space, the National Labor Relations Board (“Board”) made waves several weeks ago with its highly controversial new test for determining if an entity is a “joint employer” of another entity’s employees. Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015). The Board has wasted no time in seeking to extend its new test to the health care industry.

A recent ruling from the National Labor Relations Board (NLRB) has broadened the standard for assessing joint-employer status under the National Labor Relations Act (NLRA).

A recent ruling from the National Labor Relations Board (NLRB) has broadened the standard for assessing joint-employer status under the National Labor Relations Act (NLRA).

In a ruling that redefines the concept of employment in the United States, the National Labor Relations Board yesterday issued its much-anticipated decision in Browning-Ferris Industries of California, Inc. d/b/a Newby Island Recyclery, 362 NLRB No. 186 (2015). The decision rewrites and drastically expands the definition of who is a “joint employer” under the National Labor Relations Act. The business community has been bracing for this decision for several months, and now that it has been released, the Board’s new standard is likely to create a host of labor relations ...

Reprinted with permission of Nation’s Restaurant News

In a long-awaited ruling, the National Labor Relations Board on Thursday upheld a controversial shift in the standard for determining “joint employer” status in a closely watched case that is expected to reverberate through the franchising world.

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In a ruling that redefines the concept of employment in the United States, the National Labor Relations Board yesterday issued its much-anticipated decision in Browning-Ferris Industries of California, Inc. d/b/a Newby Island Recyclery, 362 NLRB No. 186 (2015). The decision rewrites and drastically expands the definition of who is a “joint employer” under the National Labor Relations Act. Businesses have been bracing for this decision for several months, and now that it has been released, it appears their worst fears have been realized.

On July 6, 2015, the National Labor Relations Board invited interested parties and amici to submit briefs in Miller & Anderson, Inc., 05-RC-079249, in connection with the Board’s reexamination of whether temporary employees provided to a company by staffing agencies may be included in the same bargaining unit as the company’s direct employees.  Briefs are due by September 4, 2015.

On September 28, California Governor Jerry Brown signed into law AB 1897, a bill that extends liability for workers supplied by “labor contractors” to the contracting employer. The new law provides that a “client employer,” defined as a business entity that obtains or is provided workers to perform labor within its usual course of business from a labor contractor, will share responsibility and liability with the labor contractor for payment of wages and failure to secure valid workers’ compensation coverage. The definition of “client employer” excludes businesses with a workforce of fewer than 25 workers (including both employees and temp hires) and those with 5 or fewer temp workers at any given time. The law also includes an anti-retaliation provision.