NLRB Announces New Joint Employer Standard

In July of last year, the National Labor Relations Board released an advice memorandum directing regional offices to treat the franchisors and franchisees of McDonald’s as joint employers in a series of unfair labor practice cases pending throughout the country.  The memorandum, which was issued by the NLRB’s Office of General Counsel, did not carry the weight of law but nonetheless provided a strong indication of the Board’s future direction.

Last month, the Board took a major step in turning the advice in the July 2014 memorandum into actual law.  The Board held in a 3-2 decision that companies may be held to be joint employers if they “share or codetermine those matters governing the essential terms and conditions of employment.”  The Board’s decision in Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186 (Aug. 27, 2015), overturns long-standing precedent that had found franchisors to be too far removed from the day-to-day decisions of franchisees to be considered joint employers.  In reaching their decision, the three members of the majority explained that the NLRB’s standards simply did not recognize the realities of today’s workforce in which far more contingent workers are employed by employment agencies.

The genesis of the Browning-Ferris dispute began in August 2013, when a regional director for the NLRB held that a Browning-Ferris subsidiary was not a joint employer of workers provided by a subcontractor under a labor services agreement.  The International Brotherhood of Teamsters appealed the regional director’s determination and the NLRB granted review.  In granting review, the Board explained that it intended to consider the continuing vitality of two of its cases from 1984.  In those two cases, the Board had announced a joint employer standard that required a showing that a joint employer exercised “substantial direct control” over an employment relationship.

The Board majority noted that the two 1984 cases were based on an earlier decision from the U.S. Court of Appeals for the Third Circuit, NLRB v. Browning-Ferris Industries of Pennsylvania, Inc.  In that case, the Third Circuit had found that employers could be considered joint employers if they “share or codetermine those matters governing the essential terms and conditions of employment.”  Returning to the standard in that case, the Board majority found that, since 1984, the NLRB had improperly focused on “actual control” of workers in determining a joint employer status, rather than the common law principle that focuses on the “right to control” employees.

Under the new standard announced by the majority Board, companies may be considered joint employers if they are employers within the meaning of the common law (i.e. have the “right to control”) and they share or codetermine those matters governing the essential terms and conditions of employment.  Consequently, not only will evidence of direct control be relevant to determining joint employer status, but evidence of indirect or potential control over working conditions will also influence the determination.

NLRB Seeking Comments on Employee Email Use

In 2007, the National Labor Relations Board (NLRB) decided in a split decision that employees do not have a statutory right to use an employer’s email system to engage in activities protected under federal labor law.  Relying on this decision, known as Register Guard, many employers have since adopted policies limiting the extent to which employees may use employer-provided email and communications systems for protected concerted activities.

Now, in a case currently pending before the NLRB, the Board has signaled it is considering whether to revisit its holding in Register Guard.  At issue in the case is a decision by an administrative law judge to dismiss an allegation that the employer, Purple Communications, Inc., committed an unfair labor practice by maintaining a rule prohibiting employees from using company email for non-work-related purposes. Disappointed with the judge’s ruling, the NLRB General Counsel filed an exception and requested that the Board overrule the Register Guard decision.
 
The Board appears to have taken the General Counsel’s request to heart and has invited the parties in Purple Communications, Inc., as well as other interested parties, to submit briefs on the issue.  Specifically, the Board has requested parties to address the following questions:

1. Should the Board reconsider its conclusion in Register Guard that employees do not have a statutory right to use their employer’s email system (or other electronic communications systems) for Section 7 purposes?
2. If the Board overrules Register Guard, what standard(s) of employee access to the employer’s electronic communications systems should be established?  What restrictions, if any, may an employer place on such access, and what factors are relevant to such restrictions?
3. In deciding the above questions, to what extent and how should the impact on the employer of employees’ use of an employer’s electronic communications technology affect the issue?
4. Do employee personal electronic devices (e.g., phones, tablets), social media accounts, and/or personal email accounts affect the proper balance to be struck between employers’ rights and employees’ Section 7 rights to communicate about work-related matters? If so, how?
5. Identify any other technological issues concerning email or other electronic communications systems that the Board should consider in answering the foregoing questions, including any relevant changes that may have occurred in electronic communications technology since Register Guard was decided. How should these affect the Board’s decision?

While the invitation for comments on the continuing viability of Register Guard is itself notable, it is also noteworthy that the NLRB has asked parties to comment on the decision in light of how technology, and the uses of that technology, has changed in the last seven years.

The deadline for submitting briefs is June 16, 2014.