On Monday afternoon, the National Labor Relations Board (“NLRB" or "Board”) announced that it is vacating its recent Hy-Brand decision addressing joint employer liability in light of a report that questioned the appropriateness of one of the Board Members' involvement.
As we previously reported here, NLRB Inspector General David Berry recently released a report criticizing the Hy-Brand decision, which overturned the Obama-era Browning-Ferris joint employer standard, because of Board Member Bill Emanuel’s participation in the decision. The NLRB, in vacating the decision, acknowledged that Mr. Emmanuel should have recused himself from the Hy-Brand decision because of the fact that his former firm, Littler Mendelson PC, represented Browning-Ferris Industries of California’s contractor in the Browning-Ferris case.
As a result of the Board’s decision to vacate the Hy-Brand decision, the more lax 2015 Browning-Ferris standard for finding joint employment is the law of the land, yet again. That means for the time being, joint employment liability is based upon a showing of “indirect control” or the ability to exert control rather than a showing of “direct and immediate control” as announced in Hy-Brand and consistent with decades of NLRB case law.
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Now that the Hy-Brand decision has been vacated, employers may be stuck with the more unforgiving Browning-Ferris joint employer standard for a while. At the time of the Hy-Brand decision, Republicans owned a 3-2 majority. However, then-NLRB Chairman Phil Miscimarra’s term expired, resulting in the current 2-2 split. President Trump has yet to announce a nominee to fill the open seat. Even if President Trump quickly names someone and that person is confirmed by the Senate, Mr. Emanuel may find himself under pressure to recuse himself from any other case that would overturn Browning-Ferris, leaving the Board without the necessary majority vote. This situation may put more pressure on Congress to pass legislation to adopt a “direct and immediate control” joint employer standard. For now, we will wait and continue to monitor the repercussions of this decision. Should you have any questions or concerns regarding joint employer liability, do not hesitate to contact the experts at The Saqui Law Group.