On December 14, 2017, in Hy-Brand Industrial Contractors Ltd. & Brandt Construction Co., the National Labor Relations Board (NLRB) voted 3-2 to overturn the joint employer test set forth in the Browning-Ferris Industries (“BFI”) case, reverting back to the previous standard which had been in effect for 30+ years. The board’s decision means employers will not be considered joint employers by the NLRB merely because they have the ability to control the terms and conditions of employment. Employers must exercise actual control. Interestingly, the board agreed with the administrative law judge (“ALJ”) that the two employers at issue were, in fact, joint employers. However, the board disagreed with the ALJ’s application of the joint employer test enunciated in the BFI case.
The board’s decision, which was rendered along political party lines, is not surprising as the recent appointments by President Trump created a Republican majority. A review of the opinions of the board reveal that the board members are deeply divided over the correct application of the joint employer test. The BFI case remains pending before the D.C. Circuit Court of Appeals; arguments were heard in the Spring of 2017.
It is unclear what the import of the Hy-Brand Industrial Contractors case will be until the BFI decision is announced. We will keep you apprised of any and all developments regarding joint employer status as they arise. If you have any questions regarding joint employers, please contact a member of our Labor and Employment Practice.