Rhetoric vs. Reality: The Joint Employer Standard

Examining the Real-World Impact of the NLRB’s Controversial Browning-Ferris Decision

In the aftermath of the National Labor Relations Board’s (NLRB) Aug. 27, 2015 decision in Browning-Ferris Industries (BFI), which saw the creation of a new “joint employer” standard in federal labor law, questions have been raised about the real-world impact of the ruling on millions of local businesses. As Congress considers the Protecting Local Business Opportunity Act (PLBOA), legislation to repeal the NLRB’s harmful joint-employer ruling, it’s important to separate the common myths from the facts. Get the facts here .

Myth:

The BFI decision only reinterprets the NLRA, and won’t have any impact on other statutes.

Fact:

It is unclear if other agencies will adopt the NLRB’s joint employer standard. However, we do know that the Department of Labor (DOL) and Occupational Safety and Health Administration (OSHA) have developed new draft guidelines instructing investigators to gather similar information from franchisors and franchisees unrelated to workplace safety. Other agencies may also impose similar joint employer liabilities for employment discrimination, sexual harassment, wage and hour compliance, independent contractor misclassification, immigration and workers’ compensation.

Myth:

The BFI decision only affects large corporations.

Fact:

The NLRA covers nearly all private sector businesses, small and large, and their employees. Therefore, the BFI decision could impact the operations of all businesses, both small and large, including the ability of small businesses to control their own operations and enter into contracts with other entities.

Myth:

Lawyers and lobbyists are creating fear for small businesses where none should exist. The BFI ruling will have no impact on small businesses. The PLBOA is purely intended to help big business.

Fact:

The new joint employer standard based on “indirect control” could be applied to nearly any conceivable business relationship. All small and large businesses could be negatively impacted.

Myth:

A new joint employer standard would simply be a slight reinterpretation of the National Labor Relations Act (NLRA).

Fact:

The National Labor Relations Board’s (NLRB) General Counsel proposes an amorphous “indirect control” joint employer standard based on a new and novel “economic realities” test. The impact would be unprecedented and massive; almost any economic or contractual relationship could trigger a finding of joint employer status under the proposed new standard.

Myth:

A change to the NLRA only affects large corporations.

Fact:

The NLRA covers nearly all private sector employees and small businesses.