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National Labor Relations Board Goes Back to The Future

By: Cary Burke

On February 26, 2018, the National Labor Relations Board (“NLRB”) issued an Order vacating its recent decision on the issue of joint-employer in  Hy-Brand Industrial Contractors & Brandt Construction Co., 365 NLRB No. 156 (2017).  The 3-0 decision by the NLRB (in which Member William Emanuel did not participate) effectively reinstates the NLRB’s controversial “indirect control” joint-employment test from the Browning-Ferris decision.  362 NLRB No. 186 (2015).

The NLRB’s Hy-Brand decision, issued 3-2 along party lines on December 14, 2017, had sought to overturn the NLRB’s previous Browning-Ferris joint-employer jurisprudence.  In Browning-Ferris, the NLRB departed from long-established jurisprudence and determined that a joint-employment relationship could be found where an entity maintained “indirect control” over another entity’s employees’ terms and conditions of employment, or where “industrial realities” dictated the finding of a joint-employment relationship. 

Critically, Member Emanuel was a shareholder working at the same law firm that represented a party to the Browning-Ferris decision, yet still participated in the Hy-Brand decision.  Upon issuance of the Hy-Brand decision, the Charging Parties sought reconsideration from the NLRB and the recusal of Member Emanuel from any further case proceedings on the grounds that his former law firm was involved in the Browning-Ferris decision.

Given the request for recusal, the NLRB’s Designated Agency Ethics Official investigated the propriety of Member Emanuel’s participation in the Hy-Brand decision.  The Ethics Official determined that because Member Emanuel would have been prohibited from participating in the Browning-Ferris decision as a result of his former firm’s involvement in the case, he was likewise barred from participating in the Hy-Brand decision because Hy-Brand involved the same legal arguments as Browning-Ferris.  Accordingly, based upon the Ethics Official’s determination, the NLRB vacated Hy-Brand and disqualified Member Emanuel from any further case proceedings.        

Companies that rely on contingent staff or temporary workforces should proceed carefully (for now), as the NLRB’s “indirect control” joint-employment test from Browning-Ferris is once again the state of the law.  However, it is widely expected the NLRB will revisit the joint-employment issue in a different case once nominee John Ring, a management-side labor and employment attorney, is confirmed as the NLRB’s fifth member.  Mr. Ring’s confirmation is expected in the coming weeks.  In addition, the seemingly-mooted challenge to Browning-Ferris will now return to the U.S. Court of Appeals for the D.C. Circuit for further proceedings.  Stay tuned, as we will cover further updates to both the Hy-Brand and Browning-Ferris sagas, as well as other key NLRB rulings.