The Franchise Memorandum

A series of unusual developments has brought the NLRB’s joint-employer standard back in front of the D.C. Circuit, where the federal court will finally weigh in on the 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186 (2015). For many years prior to 2015, when determining when two or more entities would be considered a “jointemployer” under the National Labor Relations Act, the NLRB looked at whether an entity possessed and exercised direct control over employees’ terms and conditions of employment. In Browning-Ferris, however, the board announced that even if an entity had never exercised joint control over the terms and conditions of employment, the Board would also consider whether that entity had either exercised indirect control through an intermediary or had reserved the right to do so. Having been found a jointemployer, Browning-Ferris appealed to the D.C. Circuit for review.

While that appeal was pending, a newly recomposed NLRB overruled Browning-Ferris in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017). As a result, the D.C. Circuit remanded Browning-Ferris back to the agency. But on February 26, 2018, the NRLB vacated Hy-Brand after a determination by the NLRB Inspector General that one of the NRLB Board Members should have been disqualified from voting in the case because of his former law firm’s involvement in Browning-Ferris. The vacation of HyBrand means that Browning-Ferris is, for now, the governing joint-employer standard at the NLRB. On April 6, 2018, the D.C. Circuit agreed to reinstate Browning-Ferris’ appeal, citing the “extraordinary circumstances” surrounding its procedural history at the NLRB. Meanwhile, Hy-Brand has filed a motion for reconsideration in its case, supported by a brief from the NLRB’s General Counsel’s office.