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NLRB RECENT DEVELOPMENTS

 

Controversial New Joint Employer Ruling

 

Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (August 27, 2015)

 

The National Labor Relations Board (“NLRB” or “the Board”) has issued a decision with significant impact on businesses that rely on the franchise business model as well as businesses that rely on employees supplied by staffing companies and/or temporary employment companies. The decision establishes a new expanded standard for determining when two entities are a single “joint employer” over a group of workers.

 

BFI Newby Island Recyclery (BFI) owned and operated a recyclery at which it had subcontracted part of the recycling operation, called the “sorting line,” to the staffing firm, Leadpoint Business Services. The Teamsters Union sought to organize the Leadpoint employees and to have BFI included as a joint employer of the Leadpoint workers whom the union sought to represent.

 

The Board stated that in determining joint employer status it will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority. Nor will the Board require that, to be relevant to the joint-employer inquiry, a statutory employer’s control be exercised directly and immediately.

 

Applying the new standard, the Board found that BFI was a joint employer of Leadpoint’s employees based on these facts:

 

  1. The contract between BFI and Leadpoint required Leadpoint applicants to pass a drug test, it also allowed BFI to prohibit Leadpoint from using former BFI employees deemed ineligible for rehire, and allowed BFI to require Leadpoint to meet or exceed its own hiring selection procedures and tests. This despite the fact that the Board acknowledged BFI did not participate in the day-to-day hiring process of Leadpoint employees.
  2. The contract gave BFI the right to discontinue the use of any Leadpoint workers, although that right had only been exercised in two instances in which BFI had asked Leadpoint not to use employees who had been observed committing acts of misconduct and in which Leadpoint had conducted its own investigation of the employees’ acts.
  3. The contract required Leadpoint workers to comply with BFI’s safety policies and BFI retained the right to enforce those safety policies, but there was no evidence showing that BFI had ever done so.
  4. The contract was a “cost-plus” contract, which, the Board concluded, indirectly set the Leadpoint employees’ pay, and prohibited Leadpoint from paying higher salaries than BFI paid for similar work.
  5. BFI controlled the speed at which the conveyor belt moved material down the sorting line, thereby controlling the speed at which the Leadpoint employees were required to work. BFI set productivity standards and assigned specific tasks.

 

This decision rejects decades-old principles for determining joint-employer status under the Act. Now joint-employer status can be based on the rights a party reserves under a contract, regardless of whether those rights are used or not, or on the indirect control it exercises over a third party’s workers due to the nature of the services it contracted to the third party, or the standards and limitations it imposed on those services.

 

Filing an FLSA Collective Action is Protected, Concerted Activity

 

200 E. 81st Rest. Corp., 362 N.L.R.B. No. 152 (July 29, 2015)

 

The Board held that a single employee who filed a collective action lawsuit in Federal District Court on behalf of himself and other similarly situated employees which alleged violations of the Fair Labor Standards Act (“FLSA”) by the employer, was engaged in protected concerted activity under the National Labor Relations Act (“NLRA”) even though the plaintiff filed the lawsuit without the consent of any other employee and despite the fact that the complaining employee could have obtained a remedy for the alleged retaliation under the FLSA.

 

The Board concluded that the employer had violated Section 8(a)(1) of the NLRA by terminating the employee after he filed the law suit. The Board held that filing and seeking class certification was an effort to induce group action that constitutes concerted activity under the NLRA.

 

This decision constitutes another example of the NLRB’s expanding and expansive view of what constitutes protected, concerted activities, and is therefore protected under the NLRA as it continues to reach into non-union workplaces.

 

As always, we will keep you posted of all developments related to this proposed rulemaking.

 

 

 

©2016 Fiddler, González & Rodríguez, P.S.C. This Watch has been prepared by Fiddler, González & Rodríguez, P.S.C. for informational purposes only and does not constitute legal advice. This information does not create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. Fiddler, González & Rodríguez, P.S.C. and its members assume no responsibility to inform you of additional changes in law or any other legal issues related to the matters discussed in this e-mail.

 

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