A recent NLRB decision, Browning-Ferris Industries of California, Inc. dramatically expanded the joint employer standard and overturned over thirty years of case law. The Board eliminated the requirement that an alleged joint employer must actually exercise direct control over workers and instead made the mere right to control such employees sufficient to establish a joint employer relationship even if that right to control is actually never exercised. Under the Browning-Ferris standard, potential control of employees is now just as probative of joint employer status as the actual control and the control need not be “direct or immediate.” Instead, the control may be “limited or routine” or even exercised through the authority of a third party.
Though the new standard has had a tremendous effect on the Occupational Safety and Health Act and the Fair Labor Standards Act, the new standard has a minimum impact on the New York City and State Human Rights Laws. A recent 2016 New York case, Jackson v. Abrams, Fensterman, Fensterman, Flowers, Greenberg & Eisman, LLP held that a second employer was not the plaintiff’s actual employer granting the defendant summary judgment on the NYC and NYS Human Rights Laws. The New York State Human Rights Law does not define the term “employer” and the courts use a four-pronged test to determine whether a defendant falls within the ambit of the State Human Rights Law by considering whether the proposed employer: (1) had the power of selection and engagement of the employee, (2) paid the salary or wages to the employee, (3) had the power to dismiss the employee, and (4) had the power to control the employee’s conduct. Thus, the Human Rights Laws do not examine joint employers with a “potential control” standard.
The new NLRB’s Browning-Ferris standard is a significant win for the working people in unions because they are the ones who want to bargain with their employers over improvements in the workplace. Without this ruling, employers can avoid bargaining by hiring temporary employees or contract employees. The new standard may provide a notice for businesses to review their own agreements such as the ones with temporary staff, subcontractors, and any other contractual agreements that may involve the interrelationship of one employer to another for potential exposure to joint employer claims.