From the Ashes: NLRB Vacates Hy-Brand Decision and Reinstates Browning-Ferris Standard for Determining Joint Employment

On February 26, 2018, the National Labor Relations Board (NLRB or Board) vacated its December 14, 2017 decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017) (see Winston’s briefing). In Hy-Brand, the Board had overturned the Obama-era expanded test for determining joint employment status, as established in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015). Now, as a result of the vacatur, the Browning-Ferris standard is reinstated at the Board.

In a much-discussed (and oft-maligned) 2015 decision, the Board in Browning-Ferris held that two or more entities could be deemed joint employers of a particular workforce under the NLRA regardless of whether they ever actually exercised control over the workers’ terms and conditions of employment. That is, to find joint-employer status, Browning-Ferris required only a finding that: (i) two or more separate employers were both “employers” in the common law sense, and (ii) they shared or co-determined matters governing the essential terms and conditions of employment. Critically, it was not necessary to find that the employers actually exercised direct and immediate control over working conditions—the mere right to control, even if unexercised, was enough.

Then, in December of last year, a 3-2 Board majority decided Hy-Brand, which overturned Browning-Ferris and returned to the pre-Browning-Ferris standard. So, once again under Hy-Brand, joint employment would be found only where two or more “entities have exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control), the control must be ‘direct and immediate’ (rather than indirect), and joint-employer status will not result from control that is ‘limited and routine.’”

Following the Board’s decision in Hy-Brand, the charging parties in that case filed a motion for reconsideration, recusal, or to strike, arguing that Board Member William J. Emanuel should have been disqualified from participating in the decision because his former law firm represented a party in Browning-Ferris. The Board’s Designated Agency Ethics Official agreed, opining that Member Emanuel is, and should have been, disqualified from participating in the Hy-Brand proceeding.

Today, a three-member panel of the Board (including the two dissenters in Hy-Brand) issued an order vacating the Board’s earlier decision in Hy-Brand. As a result, the Board panel explained that its prior overruling of Browning-Ferris “is of no force or effect.”

The Browning-Ferris decision had been appealed to the U.S. Court of Appeals for the District of Columbia Circuit, but the Court remanded it to the Board without making a decision in light of Hy-Brand. It is unclear what effect today’s decision will have on the Browning-Ferris appeal or efforts in Congress to enact legislation to define the joint employment standard.