NLRB Fails to Explain Departure from Joint Employer Precedent
Today, for the second time this week, the United States Court of Appeals for the District of Columbia Circuit issued a decision that criticized the National Labor Relations Board (NLRB) for failing to engage in a reasoned decision making. There are several issues discussed in the case, NLRB v CNN, but this post will only focus on the joint employer standard.
Joint employment is when one employer is liable for the actions of another employer and assumes collective bargaining responsibilities.
Here is background on the above-mentioned case from a previous Competitive Enterprise Institute report:
In 2003 and 2004, the cable news network CNN brought some technical work in-house. Previously, it had staffed these technical positions with contractors employed by Team Video Services, LLC (TVS). …
On April 4, 2007, the AFL-CIO filed a complaint with the NLRB alleging that the terminated workers had been fired out of anti-union animus and suffered anti-union discrimination when they were replaced by CNN in-house staff. …
Crucial to that decision is the NLRB determination that, even though CNN’s contract with Team Video Services (TVS) stated that the technical staff were employees of TVS, not CNN, CNN was still to be considered a joint employer and therefore had to abide by the collective bargaining agreements between TVS and the local unions representing TVS technical workers.
For decades, NLRB precedent regarding who constitutes a joint employer required an employer to exercise “direct and immediate” control over employment matters of another company’s workforce. This encompasses one employer being directly involved in hiring, firing, promotion, and supervision of another business. In recent years, the NLRB has imposed a far broader and vague definition of joint employer, including indirect and potential control. As I’ve previously noted, an overly broad joint employer definition can stifle opportunity for entrepreneurs, deter employers from offering skills training, and reduce job opportunities.
In CNN, the NLRB suddenly rewrote the rules on who is deemed a joint employer without explaining why it departed from the agency’s precedent. Additionally, the NLRB failed to overrule the previous decisions it issued that established the “immediate and direct” control joint employer standard. This cavalier attitude caught the eye of the D.C. Circuit.
As noted in the D.C. Circuit decision:
We conclude that the Board’s determination that CNN and TVS were joint employers cannot stand. This is not because we find that the two companies lacked a joint-employer relationship. Rather, it is because the Board applied a standard for determining whether companies are joint employers that appears to be inconsistent with its precedents, without addressing those precedents or explaining why they do not govern.
Also pointed out in the opinion, an agency may not just change precedent on a whim. They must offer a reasonable explanation for departing from precedent and discuss why a change in course must be made. In this case, the NLRB “did none of those things.”
This case is just one of many on why the Senate must quickly confirm President Trump’s second nominee to the NLRB, which would shift the balance of power at the Board.
The NLRB was constructed to act as a neutral arbiter in labor disputes that represents the public interest. During the Obama administration, as recently stated by the D.C. Circuit, the Board’s actions “are more consistent with the role of an advocate than an adjudicator.”
For far too long, the NLRB has acted with blatant pro-union bias and overturned thousands of cumulative years of precedent, often without offering a thorough reasoning for doing so. It is time for a new approach at the NLRB, one that is consistent and balanced.