August 31, 2015
In a pivotal decision on August 27, the National Labor Relations Board “refined” its test for determining joint-employer status, broadening the scope of employers subject to joint collective bargaining and concerted activity obligations imposed by the National Labor Relations Act. In a 3-2 split party-line decision in Browning Ferris Industries of California, Inc., the Board held that the power to exercise control over a workforce, rather than whether such power is actually exercised, is the appropriate lens for assessing joint employment. This new joint employment test arms the NLRB and unions with a tool to potentially exert greater influence in so-called “fractured” workplaces, which include franchised businesses, sharing economy businesses, and any company leveraging independent contractors.

Specifically, the Board held that two or more entities are joint employers of a single workforce if (1) they are both employers under the common law definition of employer; and (2) they share or codetermine those matters governing the essential terms and conditions of employment. Central to both of these inquiries is the existence, extent, and object of the putative joint employer’s control.

For an in-depth analysis on the ruling and its implications, please click here.