CDW Comments on Proposed Changes to NLRB Joint-Employer Standard

Washington, D.C. – On January 28, nearly 90 organizations joined comments filed by the Coalition for a Democratic Workplace (CDW) in response to the National Labor Relations Board’s (NLRB) Notice for Proposed Rulemaking (NPRM) containing proposed changes to the joint-employer standard under the National Labor Relations Act (NLRA).

The NLRB’s proposal adopts the long-accepted, practical requirement that the NLRB will find a joint employment relationship under the NLRA where a business or other entity actually exercises control over the essential terms and conditions of another employer’s employees. In doing so, the Board would restore clarity on this important part of the law. In the August 2015 decision in Browning-Ferris Industries (BFI) – the Board created confusion by expanding the standard without defining key terms or providing guidance as to how to implement the changes to the law. The BFI standard created massive uncertainty throughout the business community and drastically expanded the number of business relationships that could trigger joint-employer status, exposing almost every contractual relationship to unwarranted liability. The US Court of Appeals for the D.C. Circuit recently returned the BFI case to the Board, noting the BFI standard lacked clarity.

Our comments today urge the Board to adopt the Proposed Rule but with the addition of clarifying definitions that will enhance predictability and stability of the rule’s application and outline essential terms and conditions of employment that allow for meaningful collective bargaining.

CDW Seeks Rulemaking to Remedy BFI

June 13, 2018 // Washington, D.C. // Today, the Coalition for a Democratic Workplace and 16 leading associations filed a petition with the National Labor Relations Board seeking a rulemaking to remedy the confusion caused by a previous Board’s radical changes to the “joint employer” standard.

The controversial 2015 NLRB Browning Ferris Industries, or BFI decision, expanded and muddled the standard for determining when two separate companies are “joint employers” under the National Labor Relations Act. Joint employers are jointly responsible for labor violations committed by the other and bargaining with respect to any jointly employed workers.

The BFI decision overturned decades of established labor law and undermined the relationships between brand companies and local franchise business owners; contractors and subcontractors; and businesses and their suppliers and vendors. In short, BFI has cast a cloud of uncertainty over business models that have created millions of jobs and allowed hundreds of thousands of individuals to achieve the American Dream of owning their own small business.

The BFI standard also has hampered businesses’ efforts to provide guidance to and impose quality and conduct standards on franchisees, contractors and vendors to the detriment of workers and consumers.

The Petition notes that:

The BFI decision turns a blind eye to the realities of American workplaces and threatens to undermine innovative new business models and the very business relationships that are the engine of our nation’s economy.  BFI’s “reserved control” and “indirect control” standards are so vague and broad that it is often impossible for businesses to determine which relationships will trigger joint employment and which will not.  The scant guidance from the Board on how to apply this unprecedented and amorphous standard has left the regulated community in the dark as to how to structure business to business relationships in a manner that predicts liability or other joint employer obligations.

While the uncertainty created by the BFI standard negatively impacts companies of all sizes across many industries, it is particularly damaging for small and local businesses. The standard encourages larger companies to limit the number of entities with whom they contract, which stifles opportunities for small businesses and startups.

CDW’s petition, if answered affirmatively by the Board, would clarify the operating landscape and protect countless businesses.