The National Labor Relations Board’s (“NLRB’s”) revised joint-employer standard spells trouble for businesses that rely on temporary employees or contingent workers and businesses that use the franchisor-franchisee model. Citing the dramatic growth in contingent employment relationships, on August 21, 2015, in Browning-Ferris Industries of California, Inc., the NLRB abandoned its more limited joint-employer standard and adopted an expansive new standard designed to encourage collective bargaining. Under the NLRB’s old test, an entity could be found to be a joint employer only if it had the authority to control workers’ terms and conditions of employment and if it actually exercised direct and immediate control over the workers. Under the new test, an entity may be found to be a joint employer if it has the authority to control workers’ terms and conditions of employment, even if it never exercises that authority.
Applying its new test, the NLRB concluded that BFI Newby Island Recyclery (“BFI”) and Leadpoint Business Services (“Leadpoint”) were joint employers of the workers that Leadpoint supplied to BFI under a temporary labor services agreement. Under the temporary labor services agreement, Leadpoint recruited, interviewed, tested, and hired workers to perform work for BFI. In determining that BFI was a joint employer, the NLRB found it significant that Continue reading