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NLRB Vacates Browning-Ferris Joint Employer Decision


Remember back in December when the National Labor Relations Board ("NLRB") issued a decision that overruled the Obama era Browning-Ferris decision?  (Browning-Ferris expanded the definition of joint employer and placed a larger number of employers on the hook for labor law violations that were committed by their subcontractors.  Conservatives and pro-business groups detested this decision and it quickly became a focal point of criticism for the NLRB at the time.)

Of course, once Republicans gained majority control of the NLRB, they overturned Browning-Ferris in a 3 - 2 decision last December.  That decision, Hy-Brand Industrial Contractors, Ltd., reapplied the "traditional" joint employer test and required that it must be shown that the employer had direct and immediate control over essential employment terms in order to find that multiple entities were joint employers.

However, as Bloomberg wrote, a memo was obtained in which NLRB Inspector General David Berry noted that Board Member William Emanuel should have recused himself because of a potential conflict of interest.  Emanuel sided with the Board's majority to overturn Browning-Ferris in the Hy-Brand decision.  (William Emanuel, a President Donald Trump appointee, had previously worked at Littler Mendelson...a lawfirm that had represented one of the parties in Browning-Ferris.)  The investigation was prompted by several Democratic lawmakers that sought to raise concerns over Emanuel's participation in Hy-Brand.

As a result, last week, the NLRB vacated its decision in Hy-Brand.  Yes, you read that correctly.

This is a monumental move that has the potential to reshape labor and employment law policy for the foreseeable future.  Of course, many are likely wondering now that the NLRB has vacated Hy-Brand, where does that leave us?  Well, in essence, we are back to where we started...with the Obama era Browning-Ferris joint employer standard back in place.  Currently, the NLRB has a 2 - 2 split among Republican and Democratic appointees.  While President Trump has nominated a new Board member, John Ring, to fill the vacant seat, there is no guarantee his appointment would result in another overruling of Browning-Ferris.  (In Ring’s confirmation hearing before a Senate Comittee last week, Democrats made conflict of interest a major focal point.)  Even if Ring is confirmed and another case came before the Board in which Browning-Ferris could be overruled, Emanuel would likely face continued calls for him to step aside and recuse himself.  If that were to happen, unless a Democratic appointee unexpectedly switched "sides", that would leave the Board again split at 2 - 2...and Browning-Ferris would again remain in place.

Could Congress codify Hy-Brand?  Possibly.  The Save Local Business Act is already under consideration.  That bill has cleared the House but now faces some resistance in the Senate.  But it begs the question whether Republicans in the Senate will be able to pass the measure...let alone whether they have an appetite to address an issue that seemingly is not a focal point for many voters (and which Democrats could use as a lightning rod in an attempt to further paint Republicans as turning a blind eye to conflict of interest issues/attempting to improperly circumvent the matter rather than let the NLRB deal with it at a later point.).  I would expect some Democratic Senators, namely Elizabeth Warren, to strongly contest the bill (as noted above, she was a critic of Board member Emanuel not recusing himself in Hy-Brand.)


For a copy of the NLRB's statement on vacating Hy-Brand:  https://www.nlrb.gov/news-outreach/news-story/board-vacates-hy-brand-decision

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