As NLRB Vacates Recent Hy-Brand Decision
On Monday, February 26, 2018, the NLRB vacated its recent ruling in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017), effectively setting the clock back to 2015 and re-establishing the controversial joint employer test set forth in Browning-Ferris Industries, 362 NLRB No. 185 (2015). For employers, this means a return to the ill-defined but expansive conditions under which they may be deemed joint employers of a worker or group of workers.
Prior to 2015, well-established NLRB precedent held that two entities would be considered joint employers only if they actually exercised direct, immediate control over the essential employment terms and conditions of the workers at issue. In a significant departure from this precedent, the Board announced a new standard in Browning-Ferris, holding that two entities are joint employers if they retain the right to exercise even indirect control over the essential employment terms and conditions of workers, and even if one entity never actually exercises such control. At the end of 2017, however, the Board rejected this broad test in its Hy-Brand decision and embraced the narrower joint employer standard it had long-applied before Browning-Ferris.
The Return of the Browning-Ferris Test
On Tuesday, the NLRB issued an order vacating Hy-Brand based upon the determination of an Agency Ethics Official. The Official concluded that Member William Emanuel should have recused himself from deliberations in Hy-Brand because his former law firm represented one of the parties in the earlier Browning-Ferris case, which essentially analyzed the same issues. As a result, the Browning-Ferris decision has once again become prevailing law on the issue of joint employer status. Although it is unclear how long it will remain controlling law, employers would be wise to revisit written agreements and practices relating to temporary or leased workers with an eye towards minimizing the ability to even indirectly control their employment terms and conditions.