What the hell is going on at the NLRB with joint employment?

Photo by Cameron Kirby on Unsplash

If you are a small business owner, pay attention. Today’s update on the issue of joint employment will be one of the most important things you read this year.

Joint employment has been on a bit of a roller coaster ride at the NLRB over the past few months.

Today, I’m going to sort it all out for you, and try to explain where we might be headed next.


What is Joint Employment?

Joint employment is the sharing of control and supervision of an employee’s activity among two or more business entities, such that each is liable for the legal wrongs of the other to its employees (e.g., discrimination, wage and hour, OSHA, unfair labor practices…). It’s what would hold a franchisor liable for the wrongful acts of its franchisee, a contractor for its sub, and a business for its staffing company.

What are the Historic Joint Employment Rules?

For decades prior to August 27, 2015, is was uniformly established that for one entity to be a joint employer with another, it had to exercise direct and actual control over the terms and conditions of the other entities employees. Do they supervise? Are they subject to the same work rules? Can they hire, fire, and discipline? Who pays and how? Who provides benefits? Who assigns schedules and otherwise directs work? If one employer maintains control over these issues, then the other would not have been a joint employer.

Given this strict test, entities such as franchisors and general contractors felt reasonably comfortable that they were not liable for the acts of its franchisees and subs relative to their employees.

What Changed on August 27, 2015? 
Browning-Ferris Industries of Calif. 

In Browning-Ferris, the NLRB ignored and tossed out 40 years of precedent, and expanded the definition of “joint employer” not only to include those that exercise direct and actual control, but also those that exercise indirect control or reserve the potential to exercise control. OSHA and the DOL soon followed suit, and announced similar standards under their respective statutes. Small business owners, as well as other employers, (justifiably) panicked. If a franchisor, for example, is liable for the legal wrongs of its franchisees towards employees that the franchisor does not hire, fire, discipline, pay, or otherwise direct, why franchise at all? Why not just run the businesses, control the liabilities, and cut out the middle man?

December 14, 2017—Meet the New Boss, Same as the Old Boss
Hy-Brand Industrial Contractors

In Hy-Brand, the NLRB expressly overruled Browning-Ferris and restored direct and actual control as the lone test for joint employment:

[W]e overrule Browning-Ferris and restore the joint-employer standard that existed prior to the Browning-Ferris decision. Thus, a finding of joint-employer status requires proof that the alleged joint-employer entities have actually exercised joint control over essential employment terms (rather than merely having “reserved” the right to exercise control), the control must be “direct and immediate” (rather than indirect), and joint-employer status will not result from control that is “limited and routine.”

Bravo. Employers rejoiced.


The Celebration was Short Lived

On February 26, 2018, the NLRB vacated Hy-Brand, restoring Browning-Ferris (and its potential/indirect control tests) as the law of the NLRA on joint employment. Why? Because current NLRB board member Bill Emanuel, one of the three votes in Hy-Brand in favor of overturning Browning-Ferris, was a partner at the law firm that represented Browning-Ferris in 2015. This decision followed the report of NLRB inspector general David Berry earlier this month, which concluded that Emanuel should have recused himself from Hy-Brand, not because Emanuel engaged in anything improper, but because the appearance of a potential conflict should have caused his recusal.


What now?

For now, Browning-Ferris remains the law on joint employment under the NLRA. And, it likely will continue as such, as without Emanuel, the highly politicized NLRB will almost certainly split 2-2 on any rehearing of Hy-Brand.

Browing-Ferris had been pending on appeal and awaiting decision. The D.C. Circuit Court of Appeals, however, dismissed the appeal and remanded the case back the NLRB for disposition consistent with Hy-Brand. You should now expect more litigation over that issue in the D.C. Circuit.

As you can see, this issue is a bit of a muddled mess.

One easy solution is the federal (and bipartisan) Save Local Business Act. It expressly defines a “joint employer” under the NLRA and FLSA as one that—

directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, or administering employee discipline.

It passed the House last November, and now awaits action in the Senate.

This past summer, I asked if joint employment was the issue to unite our divided country. For the sake of America’s small business owner, I certainly hope it does. If you are concerned about this issue (and you should be), call or email your Senator and Congressperson to urge their support of the Save Local Business Act.

2nd Circuit holds that Title VII expressly bars sexual orientation discrimination as sex discrimination

Photo by Matias Rengel on Unsplash

Yesterday, the 2nd Circuit federal court of appeals (which covers New York, Connecticut, and Vermont) held that “Title VII prohibits discrimination on the basis of sexual orientation as discrimination ‘because of … sex.’”

With its decision in Zarda v. Altitude Express [pdf], the 2nd Circuit joins the 7th Circuit, and the EEOC in interpreting Title VII as such.

My thoughts on this issue are well documented throughout the archives.

“Exhibit A” for what’s wrong with the Fair Labor Standards Act

Consider this scenario.

Employer and Employee have a good-faith dispute over whether Employer owes Employee for unpaid overtime for time Employee spent traveling.

Employee sues.

Court awards Employee $608.08 for unpaid overtime (doubled to $1,216.16 as liquidated damages).

So far, this all seems kosher.

Then, however, Employee files his petition for attorneys’ fees.

$141,236.50 in attorneys’ fees.

WIRTW #495 (the “guns” edition)

I am not a gun person. If you want to dismiss what I am about to say because of my dislike of guns, that is your prerogative. Just skip down to the links, or come back on Monday, or don’t come back at all (although the latter is a bit closed-minded).

We have a major gun problem is this country. The solution starts with a conversation about universal background checks for all owners of firearms, mandatory waiting periods, and bans on assault weapons.

When does telecommuting qualify as a reasonable accommodation?

I’m writing today’s post from the comfort of the kitchen island in my house. My son has the flu, and I’m working from home.

It’s been three years since the 6th Circuit decided EEOC v. Ford Motor Co., a groundbreaking decision in which the court issued its en banc decision declaring that telecommuting is not an appropriate reasonable accommodation, unless the employee can show that that regular attendance in the workplace, and face-to-face interaction with co-workers, are not essential elements of the employee’s job. 

Yesterday, the same court decided Mosby-Meachem v. Memphis Light, Gas & Water Division [pdf], which defined the parameters of when an employee’s job does qualify for remote work as a reasonable accommodation.

Two recent issues of confidentiality of harassment allegations

The confidentiality of harassment allegations has been a hot topic of debate in the #MeToo and #TimesUp era.

Consider, then, each of the following two pronouncements on the issue by two different branches of the federal government—one by the NLRB and one by Congress.

The FMLA does not cover dead pets (maybe)

‘E’s not pinin’! ‘E’s passed on! This parrot is no more! He has ceased to be! ‘E’s expired and gone to meet ‘is maker! ‘E’s a stiff! Bereft of life, ‘e rests in peace! If you hadn’t nailed ‘im to the perch ‘e’d be pushing up the daisies! ‘Is metabolic processes are now ‘istory! ‘E’s off the twig! ‘E’s kicked the bucket, ‘e’s shuffled off ‘is mortal coil, run down the curtain and joined the bleedin’ choir invisible!! THIS IS AN EX-PARROT!!

In all seriousness, it sucks to lose a pet.

But, does it qualify an employee for FMLA leave?

NLRB dismisses James Damore charge against Google—complaints about too much diversity are not protected

It is lawful for an employer to fire an employee who complains that his workplace is too diverse? 

According to the NLRB, the answer, at least under federal labor law, is yes, the termination is legal.

WIRTW #494 (the “affirmative action” edition)

Today, I am pleased to announce that Meyers Roman has expanded our employment-law capabilities by adding Douglas B. Brown, LLC (DBB), a boutique national affirmative action law firm.

I’ll quote my firm’s official statement:

Focusing on management-side affirmative action compliance, DBB will significantly broaden, support and strengthen our Labor & Employment Group to assure our clients’ compliance with the increasingly complex affirmative action and Equal Employment Opportunity regulations for federal contractors and subcontractors. 

DBB has served a wide range of clients in the manufacturing, mining, construction, communications, financial, health care, social services and educational sectors. 

According to Seth Briskin, Managing Partner and Chair of our Labor & Employment Practice group, “the addition of the DBB firm is a real differentiator for Meyers Roman. It gives us the unique ability to offer affirmative action plans and related employment law consulting to our federal contractor clients and DBB’s established client base as well as a growing number of new clients both in Ohio and across the country.”

If you are a federal contractor or subcontractor and need an affirmative action plan drafted or retooled, are engaged in an OFCCP audit, or otherwise need affirmative-action related services, please let me know how we can leverage our new capabilities to help your business.

Here’s what I read this week:

Can you pay your employees in Bitcoin?

“What is Bitcoin? I don’t understand how fake money works.”

These were the words of my 9-year-old last week.

Let me try to help him, and you, out.

Federal judge hands Grubhub a huge victory in groundbreaking gig economy trial

Raef Lawson worked as a restaurant delivery driver for Grubhub for four months in late 2015 and early 2016. He claimed that the company misclassified him as an independent contractor, and owed him overtime for hours he worked over 40 in any workweek.

Last week, in Lawson v. Grubhub [pdf], a California federal judge granted the gig-employer a huge victory by ruling that Lawson and all other similarly situated drivers are independent contractors, and not employees.

Love and work aren’t always peanut butter and chocolate

I listened with great interest to the latest episode of the Hostile Work Environment podcast, which featured as its guest my good friend, Dan Schwartz, talking about the pitfalls of Valentine’s Day at work.

Dan cited CareerBuilder’s annual V-Day survey, which offers some interesting stats about the current state of office romances:

• 22 percent of workers have dated their boss (up 7 percent from last year)
• 31 percent of workers who started dating at work ultimately married each other
• Almost one in ten female workers whose work romance soured left their job
• 41 percent of workers had to keep their romance a secret

Yet, love and work do not always go well together, especially on Valentine’s Day.

What does it mean to be religious?

Lately, I’ve been thinking a lot about religion. Or, rather, what it means to be religious.

I am not religious. Or at least not in the organized sense.

This does not mean that I am an atheist, or a pagan, or a heathen, or whatever other aspersion you’d like to cast upon me.

It just means that I do not believe I need a building and a structure upon which to ascribe my beliefs.

WIRTW #493 (the “Super Bowl” edition)

Today’s goal:

Strive to be the type of employer that engenders this type of loyalty in your employees.


Here’s what I read this week:

Sexual harassment is the hiring scarlet letter

Dear Jon, 

I resigned from my last job amid allegations of sexually inappropriate misconduct. The allegations became public. Even though the women are all liars, no one will hire me. What can I do? 

Sincerely,
Steve W.

This example has played out (sort of) at my alma mater, Case Western Reserve School of Law.

What is your profession doing to combat harassment? Mine appears to doing a lot, as ABA adopts new anti-harassment policy

The policy-making body of the American Bar Association has adopted a formal resolution that urges legal employers to prohibit, prevent, and promptly redress sexual harassment and retaliation claims.

Moreover, to make sure that law-firm leaders are paying close enough attention, Resolution 302 [pdf] also urges that firms adopt measures to ensure that the heads of law firms are informed of the financial settlements of such claims.

The resolution contains the following key measures:

The 4th nominee for the “worst employer of 2018” is … the (in)humane harasser

The 4th nominee for the worst employer of 2018 is the Humane Society of the United States, which last month voted to retain its CEO despite an internal investigation that identified and corroborated three complains of sexual harassment against him.

Happy 25th FMLA … and happy #SuperSickMonday

Last night, my Philadelphia Eagles won the Super Bowl.

Today, the FMLA turns 25.

Over the past 25 years, it is estimated that employees have used the FMLA over 200 million times to take job-protected, unpaid time off work to address their own serious medical condition or care for a family member.

WIRTW #492 (the “step up” edition)

As a dad of a woman (girl) who may someday live in the music industry, I read with great interest the comments of Recording Academy President Neil Portnow, responding to why women were so under-represented as winners at this year’s Grammys.

It has to begin with … women who have the creativity in their hearts and souls, who want to be musicians, who want to be engineers, producers, and want to be part of the industry on the executive level… [They need] to step up because I think they would be welcome. I don’t have personal experience of those kinds of brick walls that you face but I think it’s upon us—us as an industry—to make the welcome mat very obvious, breeding opportunities for all people who want to be creative and paying it forward and creating that next generation of artists.

“Can I bring my peacock to work? It’s for emotional support”

United Airlines has blocked a customer from bringing her “emotional support peacock” on a recent flight.

Truth be told, whether it was a large peacock, or a small parakeet, or a dog, or any other animal labeled “emotional support,” the airline acted well within its rights, whether dealing with a customer or an employee.

The ADA makes no reasonable accommodation allowance for “emotional support animals” of any species and of any size. Period.