National Labor Relations Board Decision Will Affect Many Government Contractors

Yesterday, the National Labor Relations Board (NLRB) issued a decision that refined its standard for determining joint-employer status. According to the Board's press release, the revised standard is designed to better effectuate the purposes of the Act in the current economic landscape. With more than 2.8 mullion of the nation's workers employed through temporary agencies (as of August 2014) the Board held that its previous joint employer standard has failed to keep apce with changes in the workplace and economic circumstances.

In the decision, the Board applied the long-established principles to find that two or more entities are joint employers of a single workforce if (i) they are both employers with the meaning of the common law; and (2) they share or co-determine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board wil consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.

The specific decision involved Houston-based BFI (Browning-Ferris Industries) and a Phoenix-based staffing agency, Leadpoint Business Services it hired to staff a recycling facility in California. In its decision, The Board found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various functions for BFI, including cleaning and sorting of recycled products. In finding that BFI was a joint employer with Leadpoint, the Board relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint as well as BFI's reserved authority to control such terms and conditions.

So what does this really mean? It could affect the growing number of temporary workers and independent contractors who do not receive the same protections as full-time employees. Many companies have been using staffing agencies to supply temporary works or contract with other companies to complete tasks. Now, both companies are responsible as joint employers because they share or co-determine those matters government the essential terms and conditions of employment.

Unions are happy with this ruling. Not too many other people or organizations willing to comment are pleased.