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Labor Regulators Set Sights on Microsoft

It has almost been one year since the National Labor Relations Board dramatically changed the definition of joint employer in Browning-Ferris.

In Browning-Ferris, the NLRB created an extremely broad standard that makes it far more likely that two businesses are considered joint employers who are liable for each other’s labor violations and bargaining responsibilities. Prior to the decision, a business had to exercise direct and immediate control over another employer’s workers to establish a joint employer status. Now a vague standard of indirect and unexercised potential control may establish a joint employer relationship.

Making matters worse for business, the Board has not issued any guidance to inform companies what kind of business relationships or conditions establish joint employer status. Therefore, one of the most feared aspects of the decision by the business community is the uncertainty it would create.

An ongoing case involving Microsoft and one of its suppliers, Lionbridge, encapsulates that concern. Relying on NLRB’s Browning-Ferris decision, the Temporary Workers of America (TWA) requested that Microsoft attend a collective bargaining meeting as a joint employer with Lionbridge, a Microsoft supplier. TWA alleges that Microsoft’s supplier code of conduct, which requires contractors to provide 15 days of paid leave to employees, establishes joint employer status.

Microsoft denies that their supplier code of conduct establishes joint employer status. In the past, placing eligibility criteria that must be met to qualify as a supplier has not indicated a joint employer relationship and is far removed from the previous standard where a company needed to exert day to day control over operations.

On July 19, 2016, the NLRB denied Microsoft’s petition to revoke the Board’s subpoena that seeks information on the relationship between Microsoft and Lionbridge. Of note, the majority at the Board notes that the NLRB may issue subpoena’s without “an objective factual basis.” The Board does not need facts to subpoena MicrosoftTWA’s allegations are enough. 

This is an example of why the business community is so concerned with the Browning-Ferris decision. The smallest conditions placed on another employer may trigger joint employer status and the liability that goes along with it. Moreover, the Board seems poised to enforce the broadest possible definition of joint employer.

Employers should be able to require a certain level of quality from another business without becoming a joint employer. By greatly expanding the likelihood of joint employer status, many large employers will discontinue relationships with small businesses that are the drivers of job creation.