Who’s On First? Browning-Ferris Back in Effect for Now
Some in franchising rejoiced last December when the Browning-Ferris standard for joint employer was overruled by the National Labor Relations Board. Now it’s back in business.
The Browning-Ferris standard for joint employer—which many in franchising despise— is back in business for now, after the National Labor Relations Board on Monday vacated its Hy-Brand decision on the grounds that one of its board members, William Emmanuel, had a conflict of interest and should have recused himself.
“Which means that, for now anyway, Browning-Ferris is again operative law,” explained David Kaufmann with Kaufmann Gildin & Robbins in an email Monday, helpfully landing in my in box right after the announcement.
This is all a bit too confusing for a late Friday afternoon, but I’ll back up to try to explain. Last December in the Hy-Brand case, the board decided to “expressly overrule the controversial joint employer standard espoused two years ago in the Browning-Ferris Industries case,” as I quoted a Gray Plant Mooty alert at the time.
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,“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.
Kaufmann was reassuring about this latest development, announced February 26. Despite the return of the Browning-Ferris standard, at least temporarily, “franchisors should not be overly alarmed in our view,” Kaufmann said in his email. One reason is the NLRB is backing off of its aggressive pursuit of McDonald’s for alleged joint employer violations.
Kaufmann put it this way: The NLRB, “in its touchstone franchisor-as-joint-employer proceeding against McDonald’s Corp. (very much grounded in the Browning-Ferris decision’s approach), last month announced plans to seek a settlement with McDonald's instead of continuing to pursue its three-year-old lawsuit” that accused the chain of being co-liable for its franchisees’ labor law violations.
Another reason to not worry too much is this: “And we are also quite confident that today’s NLRB announcement will only result in a subsequent reversal of Browning-Ferris through one avenue or another,” Kaufmann wrote.
Got it? Good. Now go enjoy your weekend, franchisors, but watch out for the mere right to control the terms and conditions of employment, whether you exercise it or not. At least for now, that’s a no-no again.