Expanded Joint Employer Standard Under Attack; What Employers Should Do in the Meantime

17 April 2017 Labor & Employment Law Perspectives Blog
Author(s): Scott T. Allen

It appears that the days of expanded joint employer liability may be numbered, as the National Labor Relations Board’s (NLRB) 2015 Browning-Ferris decision comes under attack on multiple fronts.

On April 5th, a group of 57 mostly Republican congressmen sent a letter to the Chair of the Labor Subcommittee on the House Appropriations Committee asking for a “rider” to Fiscal Year 2018 spending legislation. They are seeking to use the budget process as a way to block the NLRB’s joint employer standard. Meanwhile, in March, a federal appeals court in Washington D.C. heard oral arguments over whether the NLRB exceeded its authority when it reversed the earlier standard that had been in place for more than 30 years.

Regardless of whether these efforts to undo Browning-Ferris succeed, the joint employer standard will likely return to its narrower form once President Trump appoints two individuals to fill openings on the NLRB. When this happens, it will give the agency a Republican majority for the first time in nearly a decade.

In Browning-Ferris, the NLRB articulated a new joint employer standard that expanded potential liability for any employer that uses workers employed by another company through contractor, staffing, and other arrangements. Under the Browning-Ferris standard, an employer that uses temporary workers through a staffing agency can be held responsible for the staffing agency’s labor law violations simply because it possesses the potential authority to determine the terms of conditions of employment of the temporary workers. The old standard required that an employer actually use that authority to make actual decisions over another business’s workers to be subject to joint employer liability.

Suffice it to say that the NLRB’s Browning-Ferris decision has drawn the ire of employers from a wide range of industries. Many commentators believe the new standard is vague and makes it virtually impossible for employers to avoid liability just by using a staffing agency or contractor workers.

While this battle plays out, there are a number steps that employers should take to minimize potential joint employer liability. Employers should be as “hands-off” as possible when dealing with another company’s workers. With respect to those workers, employers should not:

  • Make or influence hire, fire, or discipline decisions;
  • Manage, supervise, train, or schedule;
  • Set wages; or
  • Provide an employee handbook or other written work rules.

Employers may exert “quality control” by specifying what needs to be accomplished (as opposed to how the work must get done), but they should not get involved in the sort of human resource management decisions listed above.

Any relationship with a staffing agency or supplier of contract labor should be in writing. Those agreements should clearly explain the responsibilities and authority of both entities. Issues that should be addressed include specifying which entity is the “employer.”

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