Federal board redefines joint employer relationship

The National Labor Relations Board issued a decision that may have a tremendous impact on Minnesota’s franchises, temporary agencies and business formation on Aug. 27. The NLRB refined its criteria for determining joint-employer status to reflect current economic practices.

In a decision adjudicating a union election dispute, the NLRB revised its long-standing definition of a joint employer relationship stemming from a 1982 U.S. Circuit Court of Appeals ruling. The NLRB found that diversity of workplace arrangements has grown in today’s economic climate. There is increased procurement of employees through staffing and subcontracting arrangements along with growth in temporary employment arrangements in more occupations.

The Board applied long-standing principles and ruled that two or more businesses are joint employers of a single workforce if two conditions are met. First, both entities are employers within the meaning of the common law. Secondly, these businesses share or codetermine the employment’s essential terms and conditions.

To determine whether an employer exercised control over workers as a joint employer, the NLRB will evaluate whether the employer exercised control over employment terms and conditions indirectly through an intermediary or whether it reserved the authority to control the worker.

In this case, the NLRB ruled that Browning-Ferris Industries of California was a joint employer with Leadpoint which supplied employees to perform cleaning and sorting of recycled products. The Board found that BFI’s direct and indirect control over the employees’ and its authority to control these terms and conditions was significant.

A NLRB member issued a dissent and said that the revised definition will impose unprecedented joint obligations to countless entitles even though they are unaware of these obligations. This may subject these businesses to joint liability for alleged unfair labor practices, collective bargaining agreement breaches and to protest activities that were previously considered as secondary strikes, boycotts and picketing.

Legal advice may be essential to business planning for promoting growth, maximizing profits, minimizing exposure to lawsuits and assuring regulatory compliance. This assistance can help employers navigate federal and Minnesota laws and administrative decisions governing business.

Source: National Labor Relations Board, “Board issues decision in Brown-Ferris Industries,” Retrieved Aug. 31, 2015

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