A DECISION BY a federal appeals court in late December regarding the National Labor Relations Board’s definitions of joint-employer status does little to help clarify that definition, according to AAHOA. Meanwhile, the NLRB is still taking public comments on a proposed rule change on that definition.
The U.S. District of Columbia Circuit Court of Appeals’ ruling on Dec. 28 upheld NLRB’s joint-employer test defined in its 2015 Browning-Ferris decision, saying it was correct to find that a company’s “right to control and indirect control” could be considered in deciding its joint-employer status. At the same time, it sent the issue back to the board for consideration over the scope of the definition of indirect control.
“The court held that the board ‘failed to differentiate between those aspects of indirect control relevant to status as an employer, and those quotidian aspects of common-law third-party contract relationships,’” the National Law Review said. “Stated plainly, the board failed to explain what constitutes ‘indirect control’ for purposes of the joint-employer test.”
The definition of joint-employer status has been in limbo since Feb. 26, when the NLRB vacated its 2017 decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. in response to a court finding that one of the board members had a conflict of interest in that case. As a result, the board’s definition on joint employers under the National Labor Relations Act and the Fair Labor Standards Act reverts to the 2015 Browning-Ferris Industries case, which the Hy-Brand decision had overruled.
The current ruling impacts franchisers and their licensees’ business decisions as franchisers would be considered joint employers with franchisees. Opponents of the NLRB ruling say it makes franchisers unfairly liable for workforce issues at franchisees’ businesses and robs owners of the autonomy established in traditional licensing contracts.
The D.C. court’s decision does nothing to help settle the issue, AAHOA President and CEO Chip Rogers said in a statement.
“This decision raises more questions than it answers regarding the joint employer standard and is yet another reminder that a statutory fix is necessary to create a clear standard,” Rogers said. “Without clarity from Congress or the NLRB through its rulemaking process, franchisors and franchisees will continue to see an ever-evolving law that perpetually confounds those who seek to comply with it.”
Rogers goes on to voice support for the Save Local Business Act, which seeks to provide the statutory fix he says is needed, and asked the NLRB to provide more clarity on the joint employer issue. The board is currently looking to do just that.
Last month the NLRB extended the comment period on rules for defining joint-employer status to Jan. 14. It also announced that comments replying to comments made in the initial comment period must be submitted by Jan. 22. The comments can be on any part of the new rule and can be submitted via www.regulations.gov, or by mail or hand-delivery to Roxanne Rothschild, Acting Executive Secretary, National Labor Relations Board, 1015 Half Street S.E., Washington, D.C. 20570-0001.