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UPDATE: NLRB Vacates Hy-Brand Joint Employer Decision; Browning-Ferris Is Back In Play

Published by and on April 12, 2018

The Board unanimously vacates recent Hy-Brand decision after ethics official report faults Board member for improperly participating in the case.

In December 2017, the National Labor Relations Board (“Board”), issued a decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. v. Dakota Upshaw et al., reversing the joint employment standard set forth in its earlier Obama-era Browning-Ferris decision. Much to the elation of many employers, the Board’s Hy-Brand decision reinstated the old joint employer standard requiring that a putative employer have actual control over employment matters that are “direct and immediate” based on the actual practice of the parties to be joint employers. The Board’s Hy-Brand decision is discussed in more detail here. After less than three months, however, the Board vacated its decision in Hy-Brand, effectively reinstating the Browning-Ferris joint employer standard.

On February 26, 2018, the Board issued an order vacating the Hy-Brand decision in light of a determination by the Board’s Designated Agency Ethics Official that one of the voting members, William Emmanuel, should have been disqualified from participating in the Hy-Brand proceeding. As the decision and order in Hy-Brand was vacated, the Board stated that “the overruling of the Board’s decision in Browning-Ferris…is of no force or effect.” This means that the Browning-Ferris joint employer standard is back in play. Under the Browning-Ferris standard, an entity may be held a joint employer if (1) it reserves authority to control terms and conditions of employment, even if not exercised, or (2) it exerts indirect control over workers. This standard has been controversial, as it greatly expands potential joint employer liability for franchisors and contractors under the National Labor Relations Act.

Welter Insight

Although Browning-Ferris is back, the Board’s decision to vacate Hy-Brand will likely be revisited as party power continues to shift under the current executive administration. In this time of uncertainty, however, employers must accept and plan accordingly under the much broader joint employer standard set out by Browning-Ferris.

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