Welcome News in Browning Re-Do, but Don’t Relax Just Yet
Keep the happy dance brief after the NLRB reversed the joint employer standard in Browning-Ferris.
“In welcome news for franchisors,” as a Gray Plant Mooty attorney put it in a franchise law alert today, last week the National Labor Relations Board decided to “expressly overrule the controversial joint employer standard espoused two years ago” in the Browning-Ferris Industries case. But anyone doing a happy dance should probably keep it brief, as Mike Gray said.
Under the previous ruling, made when Obama administration appointees controlled the board, two entities could be found to be joint employers based on “the mere right to control terms and conditions of employment, regardless of whether that right was actually exercised.” But the new board, appointed by President Trump, called that standard “a distortion of common law…contrary to the Act…and ill-advised as a matter of policy.”
The board “jettisoned this flawed standard, reinstating the joint-employer standard that had been in place for decades before Browning Ferris,” said the Gray Plant Mooty alert.
Gray went on to throw a little cold water on the news in his alert: “It does not eliminate the possibility that a franchisor and its franchisees could be found joint employers. Indeed, given the appropriate facts, the NLRB could find joint employment in a franchise relationship.”
He emphasized that franchisors should pay “careful attention” to the amount of control they exercise over the franchisees’ employees, as well as any “employment control elements” in their franchise agreements, operations manuals and field support training manuals.