Perhaps in anticipation of Labor Day, the National Labor Relations Board issued its ruling in Browning-Ferris Indus. of Cal. d/b/a BFI Newby Island Recyclery, establishing an easier standard for unions to prove that a joint employer relationship exists. This will make it easier for unions to make the upstream company, like a parent company, liable for unfair labor practices, even if the upstream company had no direct involvement.
BFI runs a recycling plant and contracts with Leadpoint to provide workers to sort garbage in the recycling plant. The staffing agreement specifically stated that Leadpoint was the sole employer of the personnel it supplied and Leadpoint handled supervision of the employees, not BFI.
Leadpoint’s employees sought to unionize and an election was held. The union filed a petition seeking a determination that Leadpoint and BFI were a joint employers.
How the NLRB Ruled
The Board found that BFI and Leadpoint were joint employers and BFI and Leadpoint would both be obligated to bargain with the union. Under the Board’s ruling, two or more entities will be joint employers if they jointly govern the essential terms and conditions of employment. Specifically, the Board will be looking to see if a common-law employment relationship exists, and if it does, whether the upstream employer possesses sufficient control over employees’ essential terms and conditions of employment. These essential terms include hiring, firing, discipline, supervision and direction.
What this Means for Employers
The NLRB greatly expanded those entities that will be treated as employers. For example, the typical staffing agency will be deemed a joint employers with the entity contracting with the staffing agency. For the entity contracting with the staffing agency, it will now be subject to the obligations of the NLRA.
Another real concern is for those now employers with contract employees on-site that have already unionized. The union may demand that the now joint employer come to the bargaining table or the union may claim that the now joint employer is subject to a bargaining agreement that it had no part in negotiating.
This decision will also make it easier for unions to bring in a franchisor as a joint employer. So, be prepared for a lot of McDonald’s type claims against national franchisors.