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October 2015 Archives

NLRB Joint Employment Ruling Creates Risks for Companies Utilizing "Temps" or Staffing Agencies

Summary: On August 27, the National Labor Relations Board ("NLRB") issued its decision in Browning-Ferris Industries of California, Inc. (362 NLRB No. 186), which departs from its long-standing joint employer test in favor of a far more expansive view of joint employment. The decision will likely have substantial implications for companies that utilize temporary staffing agencies and contractors.

Discussion:
Browning-Ferris Industries ("BFI") operated a waste recycling facility and employed approximately 60 employees who worked outside the facility. BFI also had a temporary labor service agreement with Leadpoint Business Services ("Leadpoint"), under which Leadpoint provided BFI with approximately 240 workers. The workers were sorters, housekeepers, and cleaners who worked inside the facility. Leadpoint's agreement with BFI contained provisions that required the staffing agency to hire, train, compensate, manage, discipline, review, and terminate its employees. Teamsters Local 350, which already represented the 60 BFI employees, petitioned to represent the 240 workers in negotiations with both Leadpoint and BFI, which the Teamsters argued were joint employers of the workers. Upon review, the NLRB evaluated (1) whether a common-law employment relationship existed and (2) whether the putative joint employers "possessed sufficient control" over employees' essential terms and conditions of employment. In rendering its decision, the NLRB established a new joint employer standard, whereby "sufficient control" can be established directly or indirectly based on contractual provisions between the two putative joint employers. Based in part on the following factors, the NLRB found that BFI maintained sufficient control over Leadpoint workers to establish a joint employment relationship:

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