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Whether a business is an “employer” of a particular employee may have significant consequences for its obligations under federal and D.C. law.  However, when a business is one of several that have a relationship with an employee, it is not always clear whether that business is an employer. In these cases, it is necessary to determine whether the business is a “joint employer” for purposes of applicable law. In a recent decision, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) attempted to clarify the joint employment analysis under the National Labor Relations Act (“NLRA”).

 

What is joint employment?

Joint employment issues often arise under the NLRA, which governs collective bargaining. The NLRA specifies only that an employer “includes any person acting as an agent of an employer, directly or indirectly” 29 U.S.C. § 152(2). The Supreme Court has interpreted this to require an entity to “possess[] sufficient control over the work of the employees to qualify as a joint employer” Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964).

The courts and the National Labor Relations Board (“NLRB”) have narrowed the test, making it easier for a putative employer to show that it is not a joint employer. However, the D.C. Circuit’s December 28, 2018, decision in Browning-Ferris Industries of California, Inc. v. NLRB may steer the test in favor of employees.

 

Joint employment has previously required only actual, direct, and immediate control.

For many years, courts held that two businesses are joint employers if they “exert significant control of the same employees” by “shar[ing] or co-determin[ing] those matters governing essential terms and conditions of employment NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1124 (3d Cir. 1982).  Later NLRB decisions narrowed the analysis to require “(i) actual control, as opposed to the right to control, and (ii) direct and immediate control, not indirect control.”  And in September 2018, the NLRB proposed a rule that would require a putative joint employer to “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.”

 

The D.C. Circuit now permits consideration of unexercised and indirect control.

In the latest Browning-Ferris decision, however, D.C. Circuit upheld a broader joint employment analysis considering “both (i) an employer’s authorized but unexercised forms of control, and (ii) an employer’s indirect control over employees’ terms and conditions of employment.”  It reasoned that this test is grounded in common-law rules of agency, which underpin the NLRA. The Court declined to require actual or direct control to be the only or “most important” part of the analysis.

 

The joint employment test will likely remain uncertain.

The D.C. Circuit’s decision is significant not only because it establishes a broader test for joint employment, but because it strongly suggests that the NLRB’s proposed rulemaking is impermissibly narrow. “The Board’s rulemaking,” the Court noted, “must color within the common-law lines identified by the judiciary.” Against this backdrop, the definition of joint employment may remain in flux.

 

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999.