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NLRB Vacates Hy-Brand and Revives AGC-Opposed Browning-Ferris Standard for Joint Employer Status

March 14, 2018

The saga of the joint employer standard under the National Labor Relations Act continues. It began when the National Labor Relations Board (NLRB or Board) under the Obama Administration established a broader standard for determining joint employer status in the controversial Browning-Ferris Industries case in 2015. Under the new standard, joint employer status may exist even when a company merely exercises indirect control over, or has simply reserved the right to control, essential employment terms of another company’s employees. While the case was on appeal pending decision in the U.S. Court of Appeals for the District of Columbia Circuit (AGC submitted an amicus brief supporting the appeal with other associations), the Board reversed the Browning-Ferris decision in a separate case called Hy-Brand Industrial Contractors. The decision was issued in December 2017 during a brief period of time when the Board had a full complement of five members and a Republican majority, following Pres. Trump’s appointment of Republicans William Emanuel and Marvin Kaplan and prior to the expiration of Republican Philip Miscimarra’s term. The DC Circuit promptly remanded the Browning-Ferris case back to the Board for reconsideration in light of the Hy-Brand ruling.

However, on February 9, 2018, the NLRB’s inspector general issued a report finding that Emanuel should have recused himself from the Hy-Brand deliberations because his law firm represented one of the amicus parties in Browning-Ferris and “the Hy-Brand deliberation was a continuation of the Browning-Ferris deliberative proceedings.” Referencing that report in a February 26 ruling, a three-member panel of the Board consisting of all sitting members other than Emanuel decided to vacate the Hy-Brand decision. This re-instituted the Browning-Ferris standard and left the appeal in an uncertain state. On March 1, the NLRB’s deputy associate general counsel filed a motion asking the DC Circuit to recall its decision to remand the case. And, on March 9, Hy-Brand filed a scathing motion with the NLRB seeking reconsideration of the order to vacate. The motion alleges a variety of deficiencies and improprieties of the inspector general’s report and the panel decision to vacate, including breaches of confidentiality, political motivations, unlawful delegation of authority, and a lack of legal support. In addition to a request for reinstatement of the December 2017 ruling, the motion seeks investigation into the alleged Board member and inspector general misconduct.

Meanwhile, legislation to invalidate the Browning-Ferris standard and codify a standard requiring direct and immediate control is making its way through Congress. The Save Local Business Act, an AGC-supported bill that passed the House in November 2017, could be included in an omnibus appropriations bill for the Senate to take up soon. The Save Local Business Act would also codify the joint employer standard under the Fair Labor Standards Act.

AGC will continue to monitor these cases and legislation and to inform members of significant developments.

For more information, contact Associate General Counsel Denise Gold at goldd@agc.org or (703) 837-5326.

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