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NLRB Vacates Joint Employer Decision Based on Possible Conflict

    Client Alerts
  • March 08, 2018

Earlier this year, EmployNews reported that the National Labor Relations Board had reversed its controversial 2015 Browning-Ferris decision, which set a new standard for joint employer liability for labor law violations. In the 2015 decision, the NLRB concluded that a business could be deemed a joint employer if it had the potential to control another company’s employees, even if it never sought to exercise such control. This decision impacted franchisors and other businesses with agreements that establish standards that impact employees.

Soon after President Donald Trump’s appointees assumed a majority of the NLRB, the board issued its Hy-Brand decision, which overruled Browning-Ferris and returned the joint employer status to the previous test that requires exercise of actual control. Shortly after this 3-2 decision, congressional Democrats complained that one of the board members in the majority in the case had worked at a law firm that represented the employer in one of the consolidated joint employment cases heard in conjunction with Hy-Brand.

As a result of these concerns, last week the NLRB vacated Hy-Brand and at least temporarily reinstated the prior Browning-Ferris standard. For employees, this respite may be temporary. As soon as the NLRB faces a different case that raises the same legal questions without conflicts, it can be expected to again adopt the legal position with regard to joint employment expressed in Hy-Brand.