Joint Employer—Eight Amici for the Employers
In total, 17 amicus briefs were submitted in June 2014, in the seminal National Labor Relations Board (NLRB) case on joint employers.
The case styled Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers Local 350 involves two employers, Browning Ferris Industries and their contractor Leadpoint, and one petitioner, the Teamsters.
The NLRB may decide the case as early as today, before the expiration of the term of Board Member Nancy Schiffer on December 16, 2014.
Amicus Briefs for Petitioner Teamsters Union
Nine amicus briefs supported the Teamsters’ proposed change to the thirty-plus-year precedent established to determine whether two or more different businesses jointly employ a worker. Two of these nine briefs proposing to cast off precedent came from government agencies: the National Labor Relations Board General Counsel and the Equal Employment Opportunity Commission. The other seven briefs were submitted by trial lawyers, professors, and unions.
Amicus Briefs for Employers
Eight amicus briefs opposed a change in the joint employer standard and supported the employers. These briefs were filed by business associations, councils, centers, and coalitions.
In this first posting, I examine salient points from four of the eight amicus briefs opposing an NLRB change in precedent. The next posting examines the other four.
American Staffing Association
In their brief, the American Staffing Association keys in on common-law agency principles as they would affect the definition of a joint employer.
“ASA strongly believes that a departure from established common law agency principles and the application of those principles will adversely impact the economy in general and the staffing industry and their clients in particular. Application of a new standard for the determination of joint employer status, particularly a standard lacking in predictability such as an ‘economic realities’ test, will inevitably lead to client reluctance to use the services of staffing firms, killing jobs and harming workers and the economy.”
The ASA also explained the benefits that staffing agencies provide:
“The advantages of temporary work to individuals are widely recognized by employees, businesses, economists, and policy-makers. Such work affords flexibility, training, and supplemental income for millions of individuals and provides a bridge to permanent employment… The use of temporary staffing provides employers with the flexibility to adjust the size of their work forces to meet business and economic exigencies and seasonal fluctuations quickly and at a predictable cost.”
ASA hits the NLRB for not following Congressional intent in the statute:
“Turning to the 1947 Taft-Hartley Amendments, the amended definition of “employee” was expressly intended to overrule the Supreme Court’s decision in NLRB v. Hearst Publishing, 322 U.S. 111 (1944), a decision which disregarded common law principles of agency to find that “independent contractors” were employees.”
Perhaps the most powerful point ASA makes is that the invitation to submit briefs on whether the joint employer standard should be changed constitutes an illegal end-run around a rulemaking:
“A request for briefs is not an adequate substitute for rulemaking and the Board’s discretion to make policy through adjudication, is not without limits. Inviting interested parties to submit amicus curiae briefs is designed perhaps to appear akin to the comment period under the Administrative Procedure Act (“APA”). However, in actuality this process is far less open and transparent and lacks the safeguards Congress has imposed to protect against unfair and inappropriate governance.”
International Franchise Association
The International Franchise Association (IFA) submitted an amicus letter and attached its communication from October 29, 2013, with Mr. Barry Kearney of the NLRB’s Division of Advice.
The gravamen of the letter is the admonition not to extend the ruling from the world of staffing agencies to the world of franchising:
“While we urge the Board to maintain its current legal analysis and test, we write separately to urge the Board to make clear that whatever its decision may be in Browning Ferris Industries of California, Inc., the conclusion should be limited to the precise business model before it and have no application to franchising, which is governed by many overlapping federal and state laws and regulations.”
The other main point is that other laws and regulations apply and assume the status quo:
“For example, regulations promulgated by the FTC define a franchise as a continuing relationship where (1) the franchisee distributes goods or services bearing the franchisor’s Marks or uses the franchisor’s Marks in the sale of goods or services, and (2) ‘the franchisor exerts or has authority to exert a significant degree of control over the franchisee’s method of operation, including but not limited to, the franchisee’s business organization, promotional activities, management, marketing plan or business affairs…’ 16 C.F.R. § 436.2(a)(1)(B)(1) (2103).”
Council for Labor Law Equity
The Council for Labor Law Equity (COLLE) emphasizes that the standard of actual, direct control should not be altered because the current standard strikes an appropriate balance.
“The Board’s current standard ensures that a company will be at the bargaining table if it exercises actual control over the terms and conditions of employment of its contractor’s employees…”
COLLE harps upon the fact that businesses have legitimate rationales for wanting to promote safety, and that opposing such standards could backfire to the detriment of workers. Businesses also legitimately seek to manage costs separate from any desire to run its contractors’ businesses.
“An arm’s length business agreement between a company and a supplier or contractor should not give rise to a joint employer relationship simply because the company has established production, safety, or other standards that the contractor is expected to meet. Nor should a joint employer relationship be found if the company seeks to control its costs by setting a maximum reimbursement rate for the contractor’s labor costs associated with the work performed under the contract. Companies have legitimate business reasons for including these types of terms in their agreements with suppliers and contractors.”
COLLE echoes ASA’s excellent point about the amendment of the definition of “employer” in the Taft-Hartley Act:
“If the Board were to expand the joint employer standard to cover these types of relationships, companies may be exposed to liability for unfair labor practices committed by their suppliers and contractors, even if the company exerts no control over the labor relations of the contractor and does not have knowledge of, or authorize, the contractor’s unlawful conduct. A standard which imputes liability in these circumstances, formerly employed by the Board, was condemned by Congress over 50 years ago, when Congress amended the definition of “employer” under the Labor Management Relations Act of 1947 (“LMRA”).”
Coalition for a Democratic Workplace
The Coalition for a Democratic Workplace (CDW), filing a brief with fifteen other business groups, points out that standards were not clear before the bright-line test of direct, actual control was implemented:
“Proponents of a change to the standard, including the Petitioner in this case, advocate nostalgically for a return to an “indirect control” standard that purportedly existed prior to TLI and Laerco. The Board’s standards at that time, however, were not at all clear. The Board itself noted that “[p]rior to 1982 when the United States Court of Appeals for the Third Circuit decided NLRB v. Browning-Ferris Industries, 691 F.2d 1117 (3d Cir. 1982), the Board’s analysis of what constituted a joint employer relationship was somewhat amorphous.” Goodyear Tire & Rubber Co., 312 NLRB 674, 676 (1993).”
CDW hits the NLRB’s detailing of a change in the frequency of contracting as a rationale for throwing out the current standard:
“Contrary to then-Member Liebman’s assertion, the supposed ‘growing practice in today’s economy of contracting out essential functions’ does not justify a change in the Board’s joint employer standard. Airborne Freight, 338 NLRB at 597-98. The frequency of contracting out has no bearing on the nature of contracting relationships, nor, consequently, does it affect the propriety of subjecting an entity to the duties and obligations of jointly employing another entity’s employees.”
CDW makes the point that other federal employment statutes are not relevant:
“[T]here is no logical reason to align the joint employer standard under the NLRA with that applied under the FLSA. The goals of the FLSA and the NLRA are quite different and compel a different definition.”
After emphasizing that a rulemaking would be the appropriate vehicle for making such a change in definition of a joint employer, CDW urges that any NLRB change be limited to prospective business relationships:
“Significantly, numerous appellate decisions, particularly in the D.C. Circuit, have refused to allow the Board to impose retroactive liability upon the parties to a case in which new doctrine is announced. See, e.g., Epilepsy Found. of Ne. Ohio v NLRB, 268 F. 3d 1095 (D.C. Cir. 2001); Consolidated Freightways v NLRB, 892 F. 2d 1052 (D.C. Cir. 1989); Retail, Wholesale, & Dep’t Store Union v NLRB, 466 F. 2d 380 (D.C. Cir. 1972).”
This case will be quite influential for employers, particularly contractors/subcontractors, temp agencies/staffing agencies, and franchisees/franchisors. The arguments presented in the eight briefs of this post and the next are the essence of the arguments against trashing decades of established and proven practice and precedent.
The second installment of this review of amici in favor of the employers will examine the following briefs for the employers:
- U.S. Chamber of Commerce,
- National Association of Manufacturers, National Restaurant Association, and National Waste & Recycling Association,
- Driver Employer Council of America, and
- Retail Litigation Center.
A large chunk of the American economy is at risk, and employers must prepare for the worst.
 Brief Amicus Curiae of American Staffing Association in Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers Local 350, NLRB Case 32-RC-109684, 2014, Page 2, http://mynlrb.nlrb.gov/link/document.aspx/09031d45817b0b02
 Id., Page 1
 Id., Page 8
 Notice and Invitation to File Briefs in Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers Local 350, NLRB Case 32-RC-109684, 2014, http://www.constangy.net/nr_images/officially-invited.pdf
 Id., Page 16
 Letter Amicus Curiae of International Franchise Association in Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers Local 350, Case 32-RC-109684, 2014, Page 2, http://mynlrb.nlrb.gov/link/document.aspx/09031d45817b2cbf
 Id., Page 5 of the attachment
 Brief Amicus Curiae of Council for Labor Law Equity in Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers local 350, Case 32-RC-109684, 2014, Page 2, http://mynlrb.nlrb.gov/link/document.aspx/09031d45817b2cbf
 Id., Pages 2-3
 Brief Amici Curiae of Coalition for a Democratic Workforce in Browning-Ferris Industries of California, Inc. v. Sanitary Truck Drivers and Helpers local 350, Case 32-RC-109684, 2014, Page 9, http://mynlrb.nlrb.gov/link/document.aspx/09031d45817b1d00
 Id., Page 16
 Id., Page 23
 Id., Page 27