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Browning-Ferris Not Joint Employer of Union Workers: NLRB (1)

July 29, 2020, 5:54 PMUpdated: July 29, 2020, 9:48 PM

Browning-Ferris Industries isn’t jointly liable for workers it hired through a staffing firm, the National Labor Relations Board ruled in the case that sparked a multiyear saga over the legal test for joint employment under federal labor law.

The Obama-era standard that lowered the bar for proving a company was a joint employer—which was articulated in the NLRB’s 2015 decision in Browning-Ferris—shouldn’t have been applied to Browning-Ferris, the all-Republican labor board said in its decision Wednesday.

“Upon careful consideration, we find that retroactive application of any clarified variant of the new joint-employer standard in this case would be manifestly unjust,” the board said in its ruling.

The board reinstated a regional director’s 2013 finding that staffing firm Leadpoint was the sole employer of the subcontracted workers at Browning-Ferris’ recycling facility in Milpitas, Calif. That means Browning Ferris, which is owned by Republic Services Inc., need not bargain with the International Brotherhood of Teamsters local that represents the staffing firm workers.

Republic Services and an attorney for the Teamsters local didn’t immediately respond to requests for comment.

The NLRB earlier this year finalized a regulation that set a new legal test for determining joint employment, eliminating the more worker-friendly standard from the Browning-Ferris case.

The board ruled on Browning-Ferris’ joint employer status on remand from the U.S. Court of Appeals for the District of Columbia Circuit, which sent the case back after upholding the controversial Obama-era legal test.

The 2015 board ruling expanded what it takes to prove joint employment beyond one company’s direct control over another company’s workers, to include indirect or even unexercised control.

Business groups and Republican lawmakers said the 2015 ruling would hamper job growth, disrupt business-to-business relationships, hurt small companies, and wreck the franchising model.

The NLRB overturned the 2015 Browning-Ferris decision in its December 2017 ruling in Hy-Brand Industrial Contractors. But the board then withdrew that ruling a few months later, after the NLRB inspector general said a Republican member, William Emanuel, shouldn’t have participated in the case because his former firm represented the staffing firm in Browning-Ferris.

Emanuel didn’t take part in Wednesday’s ruling.

The case is Browning-Ferris Industries, N.L.R.B., Case 32–CA–160759, Decision 7/29/20.

(Updated with additional details.)

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com

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