Over the holiday break, on December 28, the D.C. Circuit Court of Appeals issued their long awaited opinion in the Browning-Ferris case. The 2-1 decision (with Judges Millett and Wilkins [Obama] in the majority and Senior Judge Randolph [Bush 41] dissenting) is a very mixed one, leading to contradictory accounts of the court upholding the Board’s decision and invalidating the Board’s decision. Ultimately, the D.C. Circuit found that BFI should not be considered a joint employer, but still found the NLRB’s analytical structure valid. In truth, there is something to like in this decision, but also much about it that disappoints. Of note, the U.S. Chamber of Commerce’s amicus brief, that ABA signed onto, is cited and quoted by both the majority and dissent decisions, and is the only brief cited by either decision.
- In its 2015 decision in this case, the NLRB significantly expanding the scope of which companies may be considered joint employers under the National Labor Relations Act and, thus may be subject to collective bargaining obligations.
- Two or more companies may be considered the employer of an employee if it had “indirect” or “potential” control over the terms and conditions of another employer’s employees, reversing decades of precedence based on an employer needing “direct” and “immediate” control.
- The decision was significant to franchise businesses, government contractors, and any companies with significant supply chain relationships—which these days is just about everyone.
What to Like in the 12/28 Opinion:
- The majority agreed that the NLRB is not entitled to any deference (including Chevron deference) in construing the joint employer doctrine, limiting the deference that the NLRB would receive for interpreting a common law doctrine, such as the joint employer doctrine, as the NLRB has no authority or expertise when it comes to the common law.
- The majority concluded that the NLRB misapplied the joint employer doctrine in this specific case, and thus vacated the Board’s conclusion that Browning-Ferris was a joint employer.
- The majority opinion upheld the NLRB’s general approach as to when companies may be considered a joint employer, i.e. it left intact the “indirect” or “potential” control structure.
- The court remanded the case to the NLRB for further proceedings consistent with this decision, but the D.C. Circuit panel’s opinion does not take effect imminently. Both sides have until February 11, 2019 to ask for the full D.C. Circuit to rehear the case, and the decision will not take effect until the full D.C. Circuit has completed its review (either by denying any petition for rehearing or by granting rehearing and then deciding the issue on its own).
- The NLRB is also conducting a rulemaking to consider changes to the joint employer doctrine, and it has issued a proposed rule that would restore the previous definition. Comments on that proposal are currently due January 14, 2019, and last Friday’s decision certainly will have an impact on that rulemaking.
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