Executive Summary: On August 27, 2015, the National Labor Relations Board (NLRB or Board) issued its long-awaited decision in Browning-Ferris Industries (BFI) substantially changing and expanding the standard for finding a joint-employer relationship under the National Labor Relations Act (NLRA).
Articles Discussing Employee and Employer Coverage Under The NLRA.
On August 27, 2015, the last day of Harry Johnson, III’s term as a Board member, the National Labor Relations Board issued its long-awaited decision in Browning-Ferris Industries of California, Inc.1 The Board voted 3-2 to change its joint employer standard with Chairman Pearce, Member Hirozawa and Member McFerran representing the majority and Member Miscimarra and Member Johnson dissenting. The question before the Board was whether Browning-Ferris Industries (BFI) was a joint employer with Leadpoint, a staffing services company, in a union representation election covering Leadpoint’s employees.2 The Board concluded that BFI and Leadpoint were joint employers under the representation petition filed by Teamsters Local 350. In finding that BFI was a joint employer with Leadpoint, the Board relied on BFI’s indirect control and reserved contractual authority over essential terms and conditions of employment of the Leadpoint-supplied employees.
Offering franchisors a glimmer of hope on the joint employment front, the National Labor Relations Board’s Office of the General Counsel recently issued a memorandum of advice that concluded a franchisee, franchisor, and the franchisor’s development agent were not joint employers under the National Labor Relations Act. Notably, the advice memorandum issued by Associate General Counsel Barry Kearney found that a Chicago-based franchisee and franchisor were not joint employers under either the current standard for determining joint employment, or the significantly looser standard advocated by NLRB General Counsel Richard Griffin. The advice memorandum found no evidence the entities codetermined any matters “governing the essential terms and conditions of employment” with the franchisee’s employees.
The implications of an expanded definition of “joint employer” under the National Labor Relations Act was the topic of debate among Senators and panelists during a Thursday hearing held by the Committee on Health, Education, Labor and Pensions. According to Chairman Lamar Alexander (R-TN), if the National Labor Relations Board decides to adopt the NLRB General Counsel’s position on joint employment in the pending Browning-Ferris case, this move “would destroy business opportunities for about 700,000 franchisees and employers.”
As expected, the National Labor Relations Board’s Office of the General Counsel has filed an unfair labor practice complaint against a franchisor and some of its franchisees as joint employers. The Board first announced it might take action against McDonald’s USA LLC for alleged actions of its franchisees in July of this year.
A congressional subcommittee examined the merits and impact of the potential for franchisees and franchisors to be jointly responsible in cases alleging National Labor Relations Act violations.
Last month, the Sixth Circuit vacated the National Labor Relations Board’s determination ordering the operator of the Golden Living Center Nursing Home to bargain with a unit that was elected by registered nurses (RN). Through its decision in GGNSC Springfield, Corp. v. NLRB, ___F.3d ___, 2013 U.S. App. LEXIS 13472 (6th Cir. 2013), the Sixth Circuit determined that the RNs constituted supervisors under the National Labor Relations Act and were therefore not permitted to unionize, because they were authorized to issue employee memoranda to certified nursing assistants (CNA). The Sixth Circuit determined that the issuance of employee memoranda constituted an act of discipline and required the RNs to exercise independent judgment in making a determination as to whether to issue a memoranda or to give a verbal counseling.