The New Joint Employer Standard - Recent Applications to NLRA and Title VII Cases

Submitted by Firm:
Cross, Gunter, Witherspoon & Galchus, P.C.
Firm Contacts:
Abtin Mehdizadegan, J. Bruce Cross, Misty Wilson Borkowski
Article Type:
Legal Update

In August 2015, in its controversial Browning-Ferris decision, the National Labor Relations Board (NLRB) redefined the standard for determining joint employer status. In essence, Browning-Ferris dramatically narrowed the definition of joint employment under the National Labor Relations Act (NLRA). Under the new standard, employers, whether or not they exercise direct control, are more likely to be liable to employees for issues arising in joint employment scenarios, such as collective bargaining, defending unfair labor practices and addressing labor strikes.

The NLRB Limits Its Impact

On October 21, 2015, however, in its first application of this new standard, the NLRB seems to have reined in the Browning-Ferris decision. In Green Jobworks LLC, the Board determined that ACECO, a demolition and remediation contractor, was not a joint employer with Green Jobworks, its staffing agency. In distinguishing the Green Jobworks employers from those in Browning-Ferris, the Board focused its analysis on four areas:

  1. Unlike the joint employer in Browning-Ferris, which had the power to control hiring decisions, ACECO had little authority in matters of hiring, firing or disciplining employees. Instead, these decisions were mostly delegated to Green Jobworks, the staffing agency.
  2. Unlike the Browning-Ferris employer, ACECO had no control over the wages of the workers provided by Green Jobworks.
  3. In Browning-Ferris, the employer exercised daily supervision and oversight of the employees. In contrast, ACECO did not supervise the employees provided by Green Jobworks, but rather, along with these employees, was subject to the supervision of the general contractor.
  4. Because the Browning-Ferris employer oversaw activities that typically involve bargaining, such as employee break times and productivity, it closely resembled an employer. On the other hand, the NRLB found that ACECO had no such bargaining-like authority.

In the Browning-Ferris decision, the dissenting Board member expressed concern that the new standard would always hinge upon questions of fact and inevitably vary from employer to employer. As a result, the dissent argued, there would be no real, workable guidance for determining joint-employment status. This concern, when considered in light of the Board's most recent decision in Green Jobworks, proves itself to be a potent one because, as the dissenters predicted, the outcome in the Green Jobworks decision was determined using a very fact-specific analysis. Thus, Green Jobworks' application of the Browning-Ferris decision demonstrates that employees cannot simply bank on "the assumed pro-union stance of the Board," but rather must be able to present specific facts to support their cases against joint employers.

While this is just one application of the new Browning-Ferris decision, and the next could be the exact opposite, it does indicate that proactive employers who take measures to distance their oversight and authority over temporary staffing workers, sub-contractors and other third-party labors can avoid being found to be a joint employer, at least under the National Labor Relations Act.

Expanded Application to Title VII Cases

This is especially true in light of attempts to apply the Browning-Ferris standard of a "joint employer" even beyond the NLRA's application. Last month, a lawsuit was filed by a Fairfield Inn hotel employee seeking damages under Title VII for claims that her Assistant Manger sexually harassed her and several other Housekeepers into "sexual servitude." In addition to naming the hotel's ownership group, TMI Hospitality Incorporated, the plaintiff-employee also named Marriott International, who granted TMI the franchise to operate the Fairfield Inn hotel, purely on the basis that Marriott was a Franchisor to TMI.

In the complaint, the plaintiff-employee cites to Browning-Ferris in support of her claim that Marriott exercised "direct, indirect or potential control over essential working conditions." As a result, the lawsuit alleges, Marriott is a joint employer and therefore liable for the Assistant Manager's harassment. Whether the court in that lawsuit keeps Marriott in the lawsuit remains undetermined for now; however, the fact that plaintiffs will attempt to bring in franchisors and other third-party, upstream entities into civil litigation because of the Browning-Ferris decision is noteworthy to say the least.

As mentioned above, employers that utilize contract laborers, temporary staffing or operate as a franchisor/franchisee should take a proactive step in limiting business practices that could sustain a finding of joint employment (i.e., liability) that could have been avoided. Contact an attorney with the Firm for information on the measures to be taken for risk assessment purposes.