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The National Labor Relations Board Vacates Joint Employer Decision

The National Labor Relations Board’s Inspector General issued a ruling that new board member Bill Emmanuel improperly participated in the recent Hy-Brand joint employer decision.  Therefore, the National Labor Relations Board (NLRB) unanimously vacated its decision in Hy-Brand.  As such, the 2015 Browning-Ferris test for determining joint employment is once again the law of the land.

By way of background, on August 27, 2015, the NLRB announced a new standard to determine joint employment in the Browning-Ferris decision.  Under that new standard, a joint-employer relationship will be found if the alleged joint-employers possess, exercise or simply retain the right, directly or indirectly, to control essential terms and conditions of employment, even if that control is not exercised.  The Browning-Ferris decision was appealed and pending review at the U.S. Court of Appeals for the D.C. Circuit when the Hy-Brand case was presented to the NLRB.  On December 14, 2017, with new board member Bill Emmanuel participating, the NLRB issued its decision in Hy-Brand restoring the traditional joint-employer test that was in place for decades prior to Browning-Ferris.   However, Mr. Emmanuel’s former law firm, Littler Mendelson, represented a party in the Browning-Ferris case.  The NLRB inspector general, David Berry, issued a report finding that Bill Emmanuel should not have voted in the Hy-Brand case because it was linked to the Browning-Ferris case.  And because Bill Emmanuel’s former law firm was involved in the Browning-Ferris case, there was a potential conflict of interest.

Therefore, the NLRB unanimously vacated its recent Hy-Brand joint employer ruling on February 26, 2018, meaning that the 2015 Browning-Ferris test for determining joint employment is currently the law.  Mere possession of the right to control the terms and conditions of employment, even if that right is not exercised, could be sufficient for a finding of joint employment.  The issue is complicated because the Browning-Ferris case had been pending review at the U.S. Court of Appeals when the NLRB requested the case be returned to the Board.  The D.C. Circuit had not yet issued a decision on whether the new standard in Browning-Ferris was lawful.  Stay tuned for the continuing saga surrounding this important issue for employers.

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