With so few unions in Idaho, many employers pay little attention to the decisions of the National Labor Relations Board. However, the 3-2 decision in Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, and FPR-II, LLC, d/b/a Leadpoint Business Services, and Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, Petitioner, Case 32 RC 109684 (“BFI & International Brotherhood of Teamsters”) is significant for many employment and contractual relationships. By changing the definition of “joint employer,” the NLRB opens the door for attacks on franchisors by franchisees, by temporary employees against the employer contracting with the temporary staffing agency, and by independent contractors against the entity engaging their services.
Under BFI & International Brotherhood of Teamsters, a “joint employer” relationship exists when an employer not only possesses the authority to control the employees’ terms and conditions of employment, but merely reserves that authority, even if it is not exercised. Nor must the “statutory” or “joint” employer’s control be exercised directly. The NLRB found that if otherwise sufficient, control exercised indirectly, such as through an intermediary can establish joint employer status. The rule applies retroactively.
Facts of the Case
The case arose before the NLRB when the Teamsters were denied the opportunity to represent Leadpoint’s employees on the grounds that BFI was not the employer of the Leadpoint employees (BFI employees were part of the union). The Teamsters appealed this decision to the NLRB, which reversed the decision of the Regional Director. It found that requirements such as BFI’s right to require certain criteria in Leadpoint’s recruitment, interviews, tests, selection, and hiring of personnel to perform work, as its subcontractor, for BFI, and the fact that Leadpoint had to test suitability of job applicants by having them perform tasks at BFI, to constitute sufficient facts to conclude that BFI and Leadpoint were joint employers.
Leadpoint argued that its contract with BFI provided that Leadpoint had the sole responsibility to counsel, discipline, review, evaluate and terminate personnel assigned to BFI. The NLRB countered this by noting that the contract also granted BFI the authority to reject any personnel and discontinue the use of any personnel for any or no reason.
The NLBR cited a number of facts to show the control BFI exercised. BFI managers reported an observation of two Leadpoint employees passing a pint of whiskey at the job site to the Leadpoint supervisor, who immediately sent the two employees for alcohol and drug testing, which led to one employee’s immediate dismissal, and one employee’s reassignment. BFI established the working hours, established a wage schedule, required Leadpoint to consult BFI if there were there any changes to the wage schedule, and required Leadpoint to consult BFI to change shift schedules. Leadpoint employees were required to take breaks according to BFI’s schedules, and had to have their hours worked, initially submitted to Leadpoint, signed off by BFI. Without such sign-off, BFI could refuse payment to Leadpoint.
Significance to Idaho Employers
The immediate result in the case allowed the Teamsters to represent the Leadpoint employees. However, the expansion of the definition of “joint employer” will certainly affect temporary employees who are supervised by a supervisor from the temporary employment agency, yet work under the direction of the contracting employer, pursuant to hours scheduled by the contracting employer, and pursuant to terms and conditions specified by the contracting employer.
It also may effect whether or not the common law definition of “independent contractor,” as one who controls his or her own work, will hold, depending upon the fact pattern of the relationship between the entity contracting with the independent contractor and that contractor. Lastly, franchisors such as McDonald’s USA, LLC are already being challenged by the NLRB, based upon various complaints about breach of franchisee employees’ union contracts and unfair labor practices.
As of 9/17/2015, no appeal has yet been filed.
Patricia M. Olsson is a partner with the law firm Moffatt Thomas. Her practice emphasizes employment law, health care law, and medical malpractice defense. She can be reached via email at email@example.com, or 208.345.2000.