NLRB Vacates Its Hy-Brand Ruling on Joint Employer Liability

On February 25th, the National Labor Relations Board unanimously vacated its December 2017 ruling in Hy-Brand Industrial Contractors, Ltd., which determined standards for establishing joint employer relationships. This action was taken after the NLRB’s Inspector General reported that Board member William Emanuel had a conflict of interest when he ruled on the case.

Joint employer relationships impose shared liabilities and bargaining duties upon multiple employers. In Hy-Brand, the Board had noted that whether a company such as a fast-food corporation is a joint employer of workers employed by another company, like one of the chain’s franchisees, depends on the degree of control one company has over workers at the other company. Under Hy-Brand, joint liability depended on whether employer entities actually exercised direct and immediate joint control over essential employment terms in a manner that was not limited and routine.

With the HyBrand decision vacated, joint employer status is again governed by the 2015 Browning-Ferris Industries decision, which allows an employer to be found liable as a joint employer if it reserved the right to exercise control over employment terms of another company’s employees. Under that Obama-era case, no actual control is needed to establish joint liability.

The relatively lax standard established in Browning-Ferris Industries may be quite temporary. In January, President Trump selected Republican John Ring to serve as the fifth member of the NLRB. If Ring is confirmed by the Senate, the Board will have three Republican and two Democrat members and may issue a ruling in line with Hy-Brand.

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