Browning-Ferris back after labor relations board vacates joint employment decision

Dive Brief:

The National Labor Relations Board (NLRB) has vacated its recent joint employment ruling, Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. The move puts the Browning-Ferris standard for joint employment under the National Labor Relations Act back into effect.
The decision comes after NLRB's inspector general questioned the validity of Hy-Brand based on board member Bill Emanuel's relationship with Littler Mendelson P.C., the firm that was involved in the original Browning-Ferris case. Emanuel was formerly an attorney with the firm.
The Browning-Ferris standard, established during the Obama administration, expanded the definition of "joint employer" to companies that have "indirect control" over workers, and that ruling is now back in effect. The Obama-era standard was met with intense backlash from the employer community, as opponents to the ruling said it threatened well-established franchising relationships, among others.

Dive Insight:

For construction, the rule's reinstatement means certain subcontractors are once again shielded from general contractors' control and oversight. The regulation's rollback, according to the Associated General Contractors of Washington, could have made contractors tapping employment agencies or contingent workers more vulnerable to charges that concern unfair labor practices involving other employees.

At the end of 2017, the NLRB sought to take advantage of a Republican majority and pass a number of decisions before former board member Philip Miscimarra ended his term. Hy-Brand was among them, making a splash thanks to its reversal of the controversial Browning-Ferris.

But now the stability the employer community hailed with Hy-Brand is no more, and the U.S. Circuit Court of Appeals for the D.C. Circuit, which was set to review Browning-Ferris, has already remanded the case back to the NLRB. In response, some business groups have turned to the Save Local Business Act, which still sits at the Senate. The bill intends to codify the "direct control" joint employer standard into law. After Hy-Brand, a stall was expected, as the need for the bill was not considered pressing — but now it's likely the pressure is back on.

"The NLRB’s decision to vacate its own recent ruling on joint employer liability now puts greater pressure on the Senate to pass the Save Local Business Act," Trey Kovacs, labor policy expert at the Competitive Enterprise Institute, said in a statement. "This turn of events illustrates how no decision by the Board is permanent and why it is crucial for Congress to set a standard into law instead of letting regulators decide."