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NLRB Broadens Scope of Liability for "Joint Employers"

On August 27, 2015, the National Labor Relations Board (“NLRB”) issued its highly anticipated decision in

Browning-Ferris Indus. of California, et al. v. Sanitary Truck Drivers, 362 NLRB No. 186. In deciding to “revisit and revise” its joint-employer standard, the NLRB held in a 3-2 decision that Browning Ferris (BFI) was a joint employer of workers provided by a staffing agency at a BFI recycling plant. BFI owns and operates a recycling facility and employs approximately 60 employees who work outside of the facility to move materials and prepare them to be sorted inside the facility. BFI argued employees wishing to sue for employment-related claims were limited to going after the staffing agency that placed them. The Board revised its test, which required an entity to demonstrate actual and direct control over workers to establish a joint employment relationship. Under the new standard, a company is a joint-employer if it exercises “indirect control” over working conditions or if it has “reserved authority” to do so. In other words, the mere right to control (even if not exercised) can lead to joint employment.

What does this mean to California employees? It is too early to tell, but this is certainly a move in the right direction. Formerly, employers with large temporary staffs claimed temporary workers were limited to seeking redress from a staffing agency, even if the employer — not the staffing agency — was the party responsible for unlawful acts such as discrimination, harassment and wrongful termination. This new law, if followed by California courts, who are not 100% beholden to the NLRB ruling, could put employers on the hook, and hopefully force them to treat employees fairly and with integrity.

What kind of employers does this affect? In sum, any "joint" employer. Potential joint employer situations include franchises beholden to the whims of a corporate office and employers who staff their companies through temporary agencies.

Again, California courts are not required to follow the rulings of the NLRB. Often, trial courts will follow NLRB directives, and employers appeal the decisions in the California Court of Appeal or California Supreme Court, looking for a final word. Time will tell, but this is a step in the right direction.

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