The National Retail Federation joined with other business organizations on Wednesday in filing an amicus brief with the U.S. Court of Appeals for the D.C. Circuit in the Browning-Ferris Industries’ joint employer case.
In an August ruling against BFI, the National Labor Relations Board significantly broadened the definition of a joint employer.
“The ‘potential control’ and ‘indirect control’ standards announced in BFI are broad enough to cover virtually any business relationship and the murky guidance provided in the majority opinion makes it virtually impossible for businesses to apply the new standard with any confidence as to whether they are getting it right,” the NRF brief states.
Under guidelines followed for more than 30 years, NLRB held that a company had to have direct control over the actions of a franchisee or subcontractor’s employees in order to be considered a joint employer. In an August ruling in a case involving waste management company Browning-Ferris Industries, NLRB said a company could be considered a joint employer even if it had only indirect or unexercised potential control.
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In its ruling, the NLRB said, “The revised standard is designed ‘to better effectuate the purposes of the [National Labor Relations] Act in the current economic landscape.’ With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.”
In its decision, the NLRB found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various work functions, including cleaning and sorting of recycled products. In finding that BFI was a joint employer with Leadpoint, the board relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint, as well as BFI’s reserved authority to control such terms and conditions.
Noting that a retailer’s business model is dependent on a number of different contractor services, the NRF brief states, “Retailers do not hire, fire or discipline any of the employees of such contractors and lessees. Nonetheless, in order to protect their brand they must have some opportunity to control the quality of the products and services offered by the latter, to ensure that those services are being performed to specifications. This type of interest, together with routine instructions associated with the coordination of these services, should not be cause for concern about joint employer liability.”
NRF joined the Associated Builders and Contractors, Associated General Contractors of America, American Hospital Association, American Hotel and Lodging Association, International Franchise Association and National Association of Home Builders in submitting the brief. It focuses on the practical policy concerns of the construction, health care, retail and hospitality sectors of the U.S. economy, and the overall impact on franchising in each of these areas.
The International Brotherhood of Teamsters Local 350 has joined the NRLB in the case in support of the ruling.