The National Labor Relations Board (Board) published a Notice of Proposed Rulemaking and Request for Comments in the Federal Register on September 14. The proposed rule seeks to reestablish the standard for determining joint-employer status that existed before the Board’s 2015 Browning-Ferris Industries of California decision.
This is a potentially significant development for companies in the nuclear industry, particularly for those with unionized workforces. But the proposed rule is also important for nuclear companies with nonunion workforces because joint-employment issues frequently arise in whistleblower cases, in which contract employees seek to hold the utility liable under Section 211 of the Energy Reorganization Act, as well as their actual employer (the contracting company). Although the US Department of Labor (DOL)—not the Board—adjudicates Section 211 claims, DOL sometimes considers Board decisions in its adjudications. Consequently, the proposed rule, if ultimately promulgated, will likely inform future Section 211 cases.
Before Browning-Ferris, the Board considered two or more entities’ joint employers if one entity exercised control over the essential employment terms of another entity’s employees and did so “directly and immediately.” The mere ability of an employer to exercise this authority or the preservation of this authority through contractual terms was not enough to establish joint employment; the Board required that the alleged joint employer actually exercise its authority.
Browning-Ferris relaxed these standards, making it easier for employers to be deemed “joint employers” of their contractors’ employees. Browning-Ferris rejected the requirement that the joint employer actually exercise its authority and held “reserved authority…even if not exercised, is clearly relevant to the joint-employment inquiry.” After Browning, a company could be a joint employer even if its control over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised. A challenge to Browning-Ferris is still pending before the US Court of Appeals for the DC Circuit.
Many employers and business advocates criticized Browning-Ferris and, following the change in administrations, hoped that a new Board would overturn the decision. In 2017, the Board sought to overturn Browning-Ferris in Hy-Brand Industrial Contractors, Ltd., but it vacated thatdecision because the Board’s inspector general caused the involuntary recusal of a member of the Board. As a result, the Browning-Ferris standards remain in place and this proposed rulemaking followed. Under the proposed rule, joint-employer status would require “two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction. A putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.” This is essentially the pre-Browning-Ferris standard.
The NLRB is accepting written comments on the proposed rule through November 13. Comments can be submitted through the Federal Register website.
For more information, read the more detailed LawFlash authored by our labor and employment practice.
We will continue to monitor his issue.