The 360-degree saga of the joint employer rule
On Feb. 26, the National Labor Relations Board (NLRB) reversed its previous ruling on the controversial Browning-Ferris case, a stunning backtrack of its December decision to undo the Obama-era rule aimed at protecting working people from unaccountable corporations.
Also known as the joint employer rule, Browning-Ferris established a new standard for determining the relationship between employees and corporations that operate in a franchise or contract model, like McDonalds, Amazon or any number of tree trimming companies that employ IBEW members. The Obama board’s 2015 ruling, which now comes back into effect, makes it easier for employees to bargain with or hold accountable parent companies and not just with direct employers like contractors or franchises.
According to the standard, if a parent company contracts work and exercises a substantial amount of control over the conditions of employment, that company is considered a joint employer and therefore subject to the standards and laws that come with that. It also applies even if the parent company doesn’t necessarily exercise control but reserves the right to do so.
“Millions of working people were empowered by this rule,” said International President Lonnie R. Stephenson. “Without it, employers were free to dodge responsibility and point the finger at someone else, leaving their workers without any recourse.”
The February reversal came about not because of an ideological shift, but from a conflict of interest — a rare occurrence, according to former NLRB member and chairperson Wilma B. Liebman.
“I’ve never seen anything like this,” Liebman told the New York Times.
The vote in December 2017 was on a case known as Hy-Brand. That case didn’t directly address the joint employer issue, but the board voted to overturn it anyway, and NLRB member William Emanuel cast one of the votes in favor.
Prior to his appointment by President Donald Trump last year, Emanuel worked for Littler Mendelson, the world’s largest management-side law firm, which was one of the firms involved in the original Browning-Ferris case. That potential conflict prompted a letter from Sens. Elizabeth Warren of Massachusetts and Patty Murray of Washington asking for an inquiry. The letter was signed by four additional members of Congress, including New Jersey Rep. Donald Norcross, a member of Folsom, N.J., Local 351.
The NLRB’s inspector general conducted the inquiry and issued a report on Feb. 9.
“I have determined that there is a serious and flagrant problem and/or deficiency,” wrote Inspector General David P. Berry in the report. Berry also noted that the vote “calls into question the validity of that decision and the confidence that the board is performing its statutory duties.”
Berry also commented on the handling of Hy-Brand as a vehicle to overturn Browning-Ferris, noting that while the two cases started out as separate matters, the chair “marshaled Hy-Brand through the board's deliberative process” effectively consolidating them, and called it a “do over.”
Due to the inspector general’s report, the NLRB voted once more, this time without Emanuel, to undo the December decision, restoring the 2015 standard.
If a case comes before the board that properly challenges Browning-Ferris, it could then vote to overturn it again. But until that time, the standard will be one that makes it easier for working people to challenge the corporations that may not sign their checks but do determine their working conditions.
That is, unless Congress gets involved. The New York Times reported that a bill to return to the pro-employer, pre-2015 standard passed the House of Representatives in November and is awaiting action in the Senate.