Google, NCAA Joint Employer Disputes Are a Labor Board Rarity

Alphabet Inc.’s Google has found itself at the center of the joint employer debate in labor law now that contract workers directly employed by Accenture have voted 26-2 to unionize.

The Alphabet Workers Union’s Nov. 6 election win marks the second time a group of workers jointly employed by Google formed a union. The technology giant has asked the National Labor Relations Board to review an agency official’s prior determination that Google and Accenture are joint employers.

The NLRB already rejected Google’s challenge to the joint employer finding that requires it to negotiate with a union of YouTube workers hired through the staffing agency Cognizant Technology Solutions Corp., showing the power of the board’s joint employer doctrine to bring multiple employers to the bargaining table.

The joint employment doctrine also plays an important role in the NLRB’s policing of federal labor law, as joint employers share liability for unfair labor practices in addition to bargaining obligations.

At a hearing that kicked off Tuesday, NLRB prosecutors began pressing their potentially landmark case alleging the NCAA, Pac-12 Conference, and the University of Southern California jointly employ USC football players—and that the trio violated violated federal labor by failing to treat the players as employees.

Those cases lend credence to why the issue has been one of the most fiercely debated legal topics in recent history. But they’re actually a rarity at the NLRB, with joint employer disputes making up a tiny fraction of the agency’s overall case load.

Only 1% of Rulings

The agency’s regional directors—who rule in election cases—and administrative law judges—who decide unfair labor practice cases—have applied the board’s current joint employer test in just 13 cases since it took effect in 2020, according to a Bloomberg Law analysis.

That small share of rulings—about 1% of all RD and ALJ decisions issued in the last three and a half years—is consistent with the usage rate for the joint employer standard that predated the current one.

Regional directors and administrative law judges applied that test, from 2015’s Browning-Ferris Industries, in about 1% of rulings in the first three years after it was established, a 2018 Bloomberg Law analysis found.

The NLRB recently finalized a regulation that will rescind the current joint employer test, which turns on whether the putative joint employer has direct control over workers’ job terms. The new standard, which takes effect Dec. 26, also considers indirect and unexercised control, as Browning-Ferris did.

That broadened standard doubles as an invitation for unions and workers to file more election petitions and unfair labor practice charges targeting alleged joint employers. But it remains to be seen whether it leads to an uptick in litigated joint employer cases.

The board’s announcement of its upcoming new joint employer test was immediately met with a pledge from the International Franchise Association to “stop the rule through any measure available, including through a legal challenge.” A bipartisan pair of senators promised to introduce a Congressional Review Act resolution to kill the regulation.

Their criticism echoes arguments made against the Browning-Ferris test—particularly that it will punish small businesses and upend the franchise model.

Limited ‘Practical Significance’

But the heat of the joint employer debate doesn’t appear to match the real-life impact, at least when measured against how frequently the issue is litigated at the NLRB.

“Regardless of the version of joint employer at the board, I’m not sure there’s much practical significance,” said Michael Duff, a labor law professor at St. Louis University and a former NLRB attorney.

In general, most unions avoid trying to organize jointly employed workers because establishing joint employment is a highly fact-intensive issue to litigate, said Michael Oswalt, a Wayne State University labor law professor and former Service Employees International Union lawyer. That can cause a significant delay precisely when unions are trying to move as quickly as possible, he said.

The industries that are the most commonly franchised—like fast food, retail, cleaning, and fitness—aren’t where there have been the largest jumps in unionization, Oswalt said. Instead, organizing has increased in state and local government, entertainment, transportation, and warehousing, he said.

“I’m not surprised joint employer isn’t a hotly litigated issue,” Oswalt said. “It became this major topic because a multibillion-dollar corporation tried to deny responsibility for how it meddled with franchisees and workers at the franchisees.”

Joint employer as a policy issue flared in the public eye when McDonald’s Corp. was defending against a massive unfair labor practice case at the NLRB and was the target of the Fight for $15 movement’s well-publicized organizing efforts.

McDonald’s ultimately settled with the NLRB’s Trump-era general counsel in a deal that omitted a joint employer finding. And while the Fight for $15 movement helped push through minimum wage increases in a majority of US states, it didn’t produce any unionized McDonald’s locations.

Not Everyone Is McDonald’s

But not every franchisor is McDonald’s or another Fortune 500 company, as some people believe, said Michael Layman, senior vice president of government relations and public affairs for the International Franchise Association. Thousands of small franchise brands will be harmed by a broad joint employer test, as will publicly traded companies, he said.

About half of franchisors have 20 or fewer locations, while only 6% of franchisors have more than 500 locations, according to information the IFA provided from the franchise market research and consulting company FRANdata.

The impact of the NLRB’s joint employer standard goes beyond decisions from the agency, resulting in the potential for a jump in charges filed, Layman said.

“Charges are very disruptive,” he said. “Even if settled, the charges are expensive and frankly they instill fear in small business people.”

The number of unfair labor practice charges and union petitions filed with the agency doubled in the four years after the board announced it would change the standard in the then-pending Browning-Ferris decision, compared to the four years prior to that announcement, Layman said.

Still, an executive from franchisor Yum! Brands—which includes KFC, Pizza Hut, and Taco Bell—said during a recent earnings call that the NLRB’s new joint employer standard probably won’t be difficult for the company to navigate.

‘If You Build It’

The current, business-friendly joint employer standard hasn’t been a roadblock to jointly employed workers getting union elections.

Regional directors have found joint employment relationships in eight of the 10 cases in which they applied the 2020 standard, compared to four of the nine decisions applying Browing-Ferris in the initial three years of that ruling.

But unions appeared to have brought only the strongest joint employer cases under the current test, said Ellen Dichner, a lecturer at CUNY School of Labor and Urban Studies and former chief counsel at the NLRB.

For example, the case involving Google and Cognizant, in which the union won a joint employer finding, “couldn’t have been stronger,” she said.

Both the Google-Cognizant workers and the Google-Accenture workers are represented by the Alphabet Workers Union, which is affiliated with the Communications Workers of America. The Washington-Baltimore News Guild, which is also affiliated with the Communications Workers of America, represents employees of Bloomberg Law.

The board’s expanded joint employer test will provide a greater opportunity for unions in what might be a “if you build it, they will come” situation, St. Louis University professor Duff said.

The extent to which unions are targeting large franchisors like McDonald’s is unclear. But the SEIU National Fast Food Workers Union filed a charge in June against both McDonald’s and a franchisee in San Jose that could provide an early test of the NLRB’s revamped joint employer rule.

The charge alleges that McDonald’s and the franchisee cut a worker’s hours in retaliation for union activity, which included speaking with an organizer and signing a union card.

McDonald’s didn’t immediately respond to a request for a comment on the charge.

If NLRB prosecutors find merit to the allegations and issue a complaint after Dec. 26, then any joint employer claims would be assessed under the board’s expanded test.

—With assistance from Daniela Sirtori-Cortina (Bloomberg)