Court Battles

Appeals court wrestles with new joint-employer definition

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The nation’s second most powerful court grappled Thursday with whether to uphold a National Labor Relations Board (NLRB) ruling that changed the definition of a joint employer.

Judge Patricia Millett of the D.C. Circuit Court of Appeals said she didn’t understand how the joint-employer status works under the board’s new definition.

{mosads}If a company is a joint employer with its independent contractor, she asked, would it have to bargain with employees on everything or only the terms of the labor it controls.

A three-judge panel heard arguments in the case involving Browning-Ferris Industries (BFI).

The California waste management company is challenging the NLRB’s 2015 ruling that a company is considered a joint employer with a contractor if it has “indirect” control over the terms and conditions of employment or has the “reserved authority to do so.”

For the past 30 years, a company was only considered a joint employer if it had “direct” or “complete control.”

The 3-2 decision forced BFI to recognize and bargain under the National Labor Relations Act with the employees of Leadpoint, the company it hired to operate a portion of the Newby Island Landfill on the shores of the San Francisco Bay.

During arguments, the judges wrestled with what can be considered “indirect” control.

“Can you tell me what indirect control means?” Millett asked NLRB attorney Joel Heller. 

Heller argued that using a Leadpoint supervisor as an intermediary to relay orders can establish joint-employer status. He said there was evidence that BFI told Leadpoint supervisors to move certain employees to specific recycling lines.

Judge Raymond Randolph asked if he’d be considered a joint employer if he owned a restaurant and needed an exterminator to come in, but said the exterminator could only come in when the restaurant is closed.

Heller noted that BFI hired Leadpoint to do the core work of the business, not a niche job.

Millett asked whether the contract between BFI and Leadpoint would still be terminable at-will by either party as the agreement states or if the companies would have to negotiate with the union first.

After a long pause, Heller said it would depend on the collective bargaining agreement they enter into with the union.

BFI argued that under common law it is “direct” and “immediate” that matters. And that, he claimed, is how Congress understood it when it amended the National Labor Relations Act in 1974, revising the definition of “employee” to exclude independent contractors.

BFI’s attorney, Joshua Ditelberg, said the company gave input, as any company would, to make sure it was happy with the end result of Leadpoint’s work.

If that’s the standard, he said, everyone is going to be a joint employer.


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