Too Many Beef Livers? NLRB Addresses How It Will Review 29,000 Comments on Its Proposed Joint Employer Rule

NRLB Ring too many beef livers avocadosToo much of a good thing can be a bad thing. For example, according to this article in Popular Science, consuming 240 avocados in one sitting would put the average man at risk of sudden death by potassium poisoning. (It doesn’t say how many avocados an above-average man could eat, but presumably the number is similar.) 

A similarly bad outcome can result from over-consumption of beef livers, although it would take approximately 431 pounds of beef livers before the toxicity of excessive vitamin A might cause a man to think he should have stopped after 430.

Lots of comments can overwhelm an administrative agency’s internal organs as well. As we discussed here, the NLRB has proposed a new regulation that would make it harder to establish joint employment under the National Labor Relations Act. In response to the Notice of Proposed Rulemaking, the Board has received nearly 29,000 comments from interested organizations, unions, academics, business owners and individual workers (like Cindy, perhaps) about the proposed new rule.

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We’ve Got Baby Steps Toward a New Definition of Joint Employment Under the FLSA.

Baby steps joint employment FLSA new rule

I still don’t know what this is, but I got it from Wikipedia.

According to Wikipedia, which knows everything, or thinks it does, Baby Steps is the name of a Japanese manga series by Hikaru Katsuki. I have no idea what that means, but apparently it’s a story of some sort, which I infer from the following description: “The story is centered on Eiichirō Maruo, a first year honor student who one day decides that he is lacking exercise.”

This does not make me want to watch it.

I will, however, be watching the baby steps being taken by the Department of Labor’s Wage and Hour Division (WHD). On February 28, the WHD submitted a proposed new rule on joint employment to the White House Office of Information and Regulatory Affairs (OIRA). The new rule would modify the meaning of “joint employment” under the Fair Labor Standards Act (FLSA), which is the federal law governing minimum wage and overtime requirements.

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Joint Employment Update: Ohio Law Throws Franchisors a Bone, But It’s Not Entirely Delicious

This is Zippy enjoying a delicious treat.

When I throw my dog a bone, she is so happy. She goes and gets it, eats it, and wonders why she is unable to speak to express her gratitude. She doesn’t wonder, “Why is he throwing me a mere bone instead of an entire squirrel?” The bone is enough for complete contentment.

Ohio lawmakers have thrown franchisors a bone. They’ve limited the circumstances when franchisors can be held jointly liable if individual franchise owners commit certain Ohio employment law violations.

Under the new law, franchisors are not jointly liable for minimum wage, overtime, or pay frequency violations by franchise owners and are not jointly responsible for franchise owners’ responsibilities under unemployment insurance and workers’ compensation law — unless: Continue reading

Fecal Matter Meets Electrical Wind Machine: NLRB Scrambles to Re-Evaluate Joint Employment

NLRB rulemaking update browniong-ferris Hits the fanAccording to the British site, The Phrase Finder, the expression When the shit hits the fan “alludes to the unmissable effects of shit being thrown into an electric fan.” That’s lovely. The Cambridge Dictionary (also U.K.) describes the idiom a bit more delicately: “also, when the shit flies, [when] a situation suddenly causes a lot of trouble for someone.”

Thank you, British internet!

In any event, this expression seems to capture the predicament the NLRB suddenly finds itself in after the D.C. Court of Appeals issued its unexpected ruling a couple weeks ago in the ongoing Browning-Ferris case, which we wrote about here.

The ruling vastly complicated the NLRB’s efforts to adopt a more pro-business definition of “joint employment” that would require direct control over essential terms of employment before joint employment could be found. The D.C. Court of Appeals ruled that the meaning of “joint employment” under the National Labor Relations Act is determined by the common law Right to Control Test, and that the NLRB has no authority to change the definition in a way that is inconsistent with the common law meaning.

The common law Right to Control Test, to the current Board’s dismay, allows for a finding of joint employment when control is reserved, even if the right to control is not actually exercised. That ruling is contrary to the definition being proposed by the NLRB as part of its ongoing effort to enact a new regulation through the rulemaking process.

Since the D.C. Court of Appeals ruling, here’s what’s been happening:

First, two key Democratic lawmakers sent a letter to Board Chair John Ring, asking that the Board abandon its rulemaking effort in light of the court’s ruling. Nice effort, but that’s not likely to happen.

Second, “in light of the unique circumstance” posed by the court’s decision, the Board has again extended the period for the public to submit comments on the proposed rule. The new deadline is January 28, 2019, with reply comments due February 11, 2019. This is the third time the Board has extended the comment period. The second extension inspired one of my favorite posts, “Amazon Users (espec. Cindy, Amy & kris), Please Don’t Submit Comments On the NLRB’s Proposed Joint Employment Rule,” which if you missed, it’s not too late.

So what happens next?  The Board has a few options:

1. It can change the proposed rule to allow for a finding of joint employment when a company reserves the right to exercise control, even if the control is indirect and is never actually exercised, but only if the right to control covers “essential” terms and conditions of employment. That change would be consistent with the D.C. Court of Appeals ruling, but it’s not as sweeping a change as current pro-business Board majority would like.

2. It can plow forward with its current rulemaking plan and ignore the D.C. Court of Appeals. The NLRB typically ignores decisions by the U.S. Courts of Appeal on the basis that there are 12 regional federal Courts of Appeal and they don’t always agree, while on the other hand, the NLRB’s authority is national, not regional. This approach often results in circuit splits, in which Courts of Appeal issue contradictory rulings, a situation that generally results in the U.S. Supreme Court deciding the issue once and for all. If the NLRB takes this approach, a circuit split could develop, and the Supreme Court would be likely to get involved, but it would probably take years before that wound its way up to the Supreme Court.

3. It can ask the full slate of D.C. Court of Appeals judges to re-hear the case. This is called an en banc proceeding. Since the decision was 2-1, there could be some momentum toward the full slate of judges agreeing to reconsider the case, but even if that happens, there is no guarantee the ruling would be any different.

4. The D.C. Court of Appeals decision can be appealed to the Supreme Court. The Supreme Court could decide to hear the case, or it could decline and allow the law to further develop. The Supreme Court often waits to hear what other Courts of Appeal have to say before it issues a final decision. But even if the Supreme Court takes the case, there is no assurance that the NLRB will get the ruling it wants.

Here’s why. On one hand, the newly constituted Supreme Court is more conservative and is regarded as more pro-business, which would appear to suggest support for the outcome that the pro-business NLRB would want — authority to narrow the definition of joint employment to situations in which control is directly exercised, not merely reserved.

But on the other hand, the current Supreme Court seems less and less inclined to defer to agencies’ interpretations of statutes. While the current Supreme Court may be sympathetic to the outcome desired by the NLRB, it is unlikely to be sympathetic to the process by which the NLRB wants to achieve that outcome. The Supreme Court’s current members seem inclined to limit the authority of federal agencies to re-interpret the law.

There are lots of ways the joint employment saga might play out. But for now, it’s fair to say that the D.C. Court of Appeals decision was unexpected and messy, in a way that alludes to the unmissable effects of excrement being thrown into an electric fan (as the Brits might say).

For more information on joint employment, gig economy issues, and other labor and employment developments to watch in 2019, join me in Orlando on Jan. 24, Philadelphia on Feb. 26, or Chicago on Mar. 21 for the 2019 BakerHostetler Master Class on Labor Relations and Employment Law: Meeting Today’s Challenges. Advance registration is required. Please email me if you plan to attend, tlebowitz@bakerlaw.com. If you list my name in your RSVP, I will have your registration fee waived.

© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Backfired? New Ruling May Threaten NLRB’s Proposed Rule on Joint Employment

Joint employment bagpipe

The word “backfire” derives from the grooming practices of 15th century Scottish noblemen, who grew beautiful long fiery-red flowing back hair, which they brushed and braided into elaborate patterns, including the “Haggis Flow” and the “Scotch Tape.” Ok, not really. Efforts to rewrite history and change definitions can sometimes fall short of the mark.

The NLRB’s grand strategy for rewriting the definition of joint employment may have just backfired. A Court of Appeals decision issued late last week may jeopardize the Board’s rulemaking authority, even though that was not the issue before the Court.

Before we dive into the December 28, 2018 ruling, here is a quick refresher on how we got here:

  • In 2015, the Democratic-majority Board adopted a vastly expanded definition of joint employment, allowing a business to be deemed a joint employer (1) even if it did not control working conditions but merely retained the right to do so, or did so indirectly, such as through third party subcontracting, and (2) even if the working conditions that could be controlled were non-essential working conditions, not just the key terms and conditions like hiring, firing, and disciplining. This was the Browning-Ferris decision.
  • In early 2018, the newly constituted Republican Board tried to reverse its 2015 Browning-Ferris decision in a case called Hy-Brand, in which the Board enacted a much narrower, pro-business definition of joint employment, requiring direct and immediate control over essential terms and conditions of employment before a company could be deemed a joint employer.
  • Several weeks later, however, the Board reversed itself and rescinded the Hy-Brand decision after conflict of interest questions arose relating to one of the board members (Member Emanuel) who decided Hy-Brand. When the Board rescinded its Hy-Brand decision, the effect was to re-establish the expansive 2015 Browning-Ferris test as the operative definition of joint employer.
  • In light of its failed effort in Hy-Brand, the Board then chose to pursue a two-step Plan B for overruling Browning-Ferris and for narrowing the definition of joint employment.
  • Step 1 would be to enact a new regulation, creating a narrower definition of joint employment that would, in effect, overrule Browning-Ferris prospectively. That process is ongoing. Step 2 was to ask the D.C. Court of Appeals to reopen the otherwise mothballed appeal of the Board’s 2015 decision in Browning-Ferris, which adopted the current broad definition of joint employment.
  • In Step 2, the Board expected the Court of Appeals to find that the 2015 Browning-Ferris decision was an overreach and that the vastly expanded definition of joint employment could not survive. That ruling would have nicely positioned the Board to roll out its new regulation, which would substantially narrow the definition of joint employment, as it tried to do in the Hy-Brand case.

That brings us to this past Friday’s decision by the D.C. Circuit Court of Appeals (Dec. 28, 2018) and the real meaning of the word “backfire.” Step 2 did not go the way the NLRB had planned.

The Court of Appeals’ Ruling and Its Effect on Joint Employment

According to the 2-1 majority opinion, the question of whether there is a joint employment relationship under the National Labor Relations Act (NLRA) must be answered by applying the common law test for whether there exists an “agency” relationship.  The Board has no special expertise relevant to defining the common law of agency. Therefore, according to the Court of Appeals, the Board is awarded no deference in this area. In other words, the Board does not have the right to define or redefine joint employment in a way that would be inconsistent with the common law meaning of “agency.”

The Court of Appeals said that the Board’s 2015 ruling in Browning-Ferris — that indirect or reserved control can be considered when determining whether a joint employment relationship exists — was appropriate because it is consistent with the common law of agency.  Under the common law, it is the right to control that matters, even if that control is not exercised. In fact, the Court of Appeals concluded that Board has no authority to prohibit the consideration of indirect or reserved control when evaluating whether there is joint employment. (That’s what the Board is currently trying to do through rulemaking.)  The reason the Board cannot prohibit consideration of indirect or reserved control is that the common law definition of agency examines whether an entity has the right to control how work is performed, regardless of whether that control is exercised. This last point is important for reasons that the D.C. Court of Appeals was not directly addressing. That point — if it hold true — would cast doubt on the Board’s ability to implement its proposed new regulation. The regulation would require a showing of direct and immediate control (not merely indirect or reserved control) before joint employment can be found.

The D.C. Circuit Court of Appeals did not, however, give the Board’s 2015 Browning-Ferris ruling its full backing. Where the Browning-Ferris ruling went wrong, according to the Court of Appeals, was in allowing the consideration of indirect or reserved control over non-essential terms and conditions of employment.  The common law agency test requires control (or indirect or reserved control) over essential terms and conditions of employment (e.g., hiring, firing, disciplining).  The Court therefore ruled that the Board lacks authority to change that definition in a way that make a business a joint employer merely by entering into a standard subcontracting or staffing agency agreement. All such relationships involve some level of control over non-essential working terms, such as defining the type of work to be done by the subcontractor or staffing agency workers and dictating the desired result.

The 2015 Browning-Ferris case is now being remanded back to the Board to take another shot at it. That would be fine and dandy with the now-Republican-majority Board, except for the fact that the Board may now be impotent to make a meaningful pro-business change in this case, since Member Emanuel might be precluded from participating in the decision due to Littler’s representation of Leadpoint, the staffing agency in the Browning-Ferris dispute (or maybe he is not precluded now, since the one-year conflicts period has now lapsed). Member Emanuel was a shareholder in the Littler firm before his appointment to the Board in September 2017. Further complicating the possible recusal issue is the fact that Trump required his appointees to sign an Ethics Pledge that provided a two-year conflict of interest period, rather than the standard one-year period.

The most lasting effect of this Court of Appeals decision is likely to be that it calls into question whether the Board can, through rulemaking, redefine joint employment in a way that eliminates consideration of indirect or reserved control by a putative joint employer.  If the definition of joint employment under the NLRA is determined by the common law of agency, and the Board — according to this Court of Appeals — lacks the expertise to interpret the common law of agency, then the Board would lack authority to change the definition in the way it proposes.

On the other hand…

On the other hand, it may be that this decision has no lasting impact at all on the definition of joint employment under the NLRA. This was a 2-1 decision by U.S. Court of Appeals, not by the U.S. Supreme Court. The two judges in the majority were Obama appointees. The full D.C. Circuit could be asked to reconsider the issue in an en banc proceeding.  Or the matter could go to the Supreme Court (which seems unlikely).

Or, if past practice is any indicator of future behavior, the Board might just ignore the D.C. Circuit Court of Appeals, on the basis that there are 12 Circuit Courts and they often disagree. The Board is required to follow rulings by the U.S. Supreme Court, but it often ignores legal opinions issued by the individual Courts of Appeal. The Board must, of course, follow the D.C. Court of Appeals’ ruling as it relates to this particular dispute, but it will not necessarily take the Court of Appeals’ broader rulings as controlling authority on what the Board can or cannot do.

So where are we?

We’ll see. But two things are certain.  First, the definition of joint employment will continue to evolve; and second, the definition of backfire has nothing to do with Scottish nobleman or their back hair.

And at the end of the day, joint employment continues to be a messy, messy situation.

© 2019 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Disco Meets “Permanent Temps”: NLRB Decides a New Joint Employment Issue

disco-297670__480On New Year’s Eve, Sister Sledge will be playing at the Seminole Casino in Coconut Creek, Florida. (You can buy tickets here.  You’re welcome.) The sisters will, of course, play the 1979 single, “We Are Family,” which is a disco song that it’s ok to admit you like. I don’t know what else they’ll play though.  It could be a long night.

“We Are Family” is also what happens when a company retains staffing agency temps for so long that they become, in that company’s words, “permanent temps.” It’s joint employment deluxe.

A recent decision by the NLRB examines what happens when a joint employer fails to apply a collective bargaining agreement to those “permanent temps.”

Orchid Paper Products Company in Pryor, Oklahoma, produces — wait for it — paper products. Their workforce is unionized and they make frequent use of staffing agency temps. The temps frequently remain on-site for long periods of time, at which point they acquire the status of “permanent temps.”

These workers are supervised and controlled by Orchid Paper, even though they are paid by their staffing firm. The Board found that under any test — Browning-Ferris or otherwise — they are joint employees.

One consequence of being a joint employee in a union environment is that the joint employer, Orchid Paper, has to follow the requirements of the collective bargaining agreement (CBA) as to those workers, even though they’re staffing agency workers. When Orchid Paper failed to follow the CBA as to those workers, it engaged in an unfair labor practice. So far, no big surprise.

The issue to be decided here, though, was the scope of the remedy that could be imposed.

As a result of an unfair labor practice, could the Board order a a remedy that held Orchid Paper to the entire CBA for its temps?

The Board said no, ruling that only certain parts of the CBA can be applied. In other words, “We Are Family, but Maybe Only Like Third Cousins.”

The Board ruled that an order intended to remedy an unfair labor practice had to be limited. The Board could only order the joint employer to apply the CBA provisions to the joint employees that related to the working conditions that Orchid Paper controlled.

My research in preparing this blog revealed that Sister Sledge, in fact, had two other Top 20 hits in 1979 — “He’s the Greatest Dancer” and “Lost in Music.” Those of you who remember those two songs will thoroughly enjoy the New Year’s Eve Show. Bring your platform soles.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Amazon Users (espec. Cindy, Amy & kris), Please Don’t Submit Comments On the NLRB’s Proposed Joint Employment Rule

Joint employment rule NLRB comment period extended

Amazon has a popular feature that allows users to post questions about a product, and then anyone can then post an answer. But is that really such a good idea?

Should literally anyone be allowed to post a comment? Allow me to introduce you to Cindy C., who recently purchased an ice machine and is (I think) trying to be helpful to others who are considering purchasing the same brand of ice machine:

PNG image

 

Thank you Cindy. Not a helpful comment. If you decide to try the extension cord, first get out of the bathtub. Otherwise, the next post containing your name could be here.

Then there’s Amy N., who has neither Alexa nor an ounce of common sense:

6B1055D9-4CEB-45B0-A880-D540798F108A

Thank you Amy N. It’s really nice to hear from you and, best of all, now I know what to get you for Christmas!

Then there’s my favorite user comment, courtesy of kris:

8FB1A0FA-0C54-43AE-B088-8911A3FF77A6

Dear kris, we didn’t think that you did. And we still don’t. Not this thing or any other thing. You may resume finger painting.

Amazon is not the only democratic institution that invites all living, breathing creatures to provide public comments.

As we’ve written here, the NLRB is pursuing the administrative rulemaking process to craft a new definition of “joint employment.” As part of that process, there is a public comment period, during which anyone (even kris) can post a comment about the proposed rule.

So far, there have been about 8,000 comments posted, many cribbed from a cut-and-paste pro-union comment drive that invites adherents to write, “Dear _, I strongly oppose….” Many other comments, fortunately, include well-considered and thoughtful opinions, both for and against the rule. It’s the thoughtful comments that are the most helpful, kris.

The NLRB has extended the comment period through January 14, 2019, with an additional reply period through January 22 in which people can reply to a previously posted comment.

If Amy N. asks, comments may only be submitted via Alexa.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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