Appeals Court Slams NLRB Joint Employer Finding in Landmark CNN Case, But Ruling May Prove Hollow

NLRB CNN joint employment Browning-Ferris overrule Second Circuit Court of Appeals IMG_1094A federal Court of Appeals has ruled that the NLRB cannot abruptly change its definition of joint employment without sufficient explanation. This decision (the CNN case) rebukes the NLRB for its initial attempt, in 2014, to expand the definition of joint employment.

This decision does not, however, address the Browning-Ferris case that followed in 2015, in which the Board similarly expanded the definition of joint employment but, that time, with an expansive explanation and justification for doing so. Browning-Ferris in on appeal too.

Here’s what happened.

Back in the good old days, when TV was pure and the world had not yet been exposed to Janet Jackson’s halftime nipple, CNN used to contract with an outside company who supplied technicians for its TV production. CNN’s camera operators, sound technicians, and broadcast engineers were employees of a third party, and they were represented by a union.

In late 2003, just a few months before that fateful Super Bowl wardrobe malfunction, CNN decided to bring that work in house. It set up a hiring and interview process and then directly hired its own technicians, severing its ties with the third party.

That made the union mad.

The union claimed the decision was motivated by anti-union animus and filed an unfair labor practice charge. The NLRB ultimately agreed with the union, determined that CNN was a joint employer of the third party technicians, and therefore had to respect the union status of the technicians. CNN could not hit the reset button without bargaining.

There was more to the decision too, with findings of anti-union statements by supervisors and a question about whether CNN was a successor employer (which is not the same thing as being a joint employer), but for our purposes, let’s focus on the joint employment piece.

Before the Board’s CNN decision, the legal standard for joint employment under the NLRB (remember, different laws have different standards) required “direct and immediate control.” In the CNN decision, the Board inexplicably abandoned that standard and ruled that two separate entities are joint employers of a single workforce if they “share or codetermine those matters governing the essential terms and conditions of employment.”

“Share or codetermine” is much looser than “direct and immediate control.” Think of your teenage children. You may try to “share and codetermine” whether they have a party at your house when you are out of town on business, but you have no “direct and immediate control” over the matter. At least not while it happens. (Purely hypothetical. My kids didn’t do this. Kids, if you are reading, DON’T do this!)

This case has been crawling through the courts for years, but finally last week, the Second Circuit Court of Appeals ruled that the NLRB could not simply switch the test without explaining itself. On that basis alone, the Court rejected the conclusion that CNN was a joint employer of the third party technicians.

So what does this mean for Browning-Ferris and the vastly expanded definition of joint employment that the Board instituted in that case?  Unfortunately, nothing.

In contrast to the CNN case, the Board’s Browning-Ferris decision included a lengthy and expansive discussion of the joint employer standard and why the Board — like in Sympathy for the Devil, “saw it was a time for a change.”

The Browning-Ferris case is also on appeal in the Second Circuit Court of Appeals (the same appellate court that just issued this decision) but will be heard by a different panel of three judges. A decision in that case is expected in the next several months.

For now, the Browning-Ferris standard — that indirect control is enough to demonstrate joint employment — remains the standard used by the NLRB.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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NLRB Nominees Hate Puppies & Rainbows, Dems Claim

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Ok, not really, but it seemed that way.

Last week, NLRB nominees William Emanuel and Marvin Kaplan were alternatively tossed softballs and stink bombs in “questions” from Senators on the Health Education Labor and Pensions Committee (known in Congressional circles as the HELP Me Rhonda, HELP HELP Me Rhonda Committee).

I use the word “questions” in quotes because, as both Americans who have ever watched C-SPAN would know, these events are typically staged to allow Senators who have already made up their minds to hear themselves talk, rather than ask questions. Here’s an example:

Question by Sen. Elizabeth Warren:  “Your entire career has been to discourage union membership and I just don’t understand how we can rely on you to defend workers after a long career of making it harder for them to join unions.  But let me push to another point… [changing the topic].”

Or this:

Question by Sen. Warren: “You have made it clear that you have pre-judged. … I think the American people deserve better.”

I don’t think she has pre-judged the nominees though. Just sayin’.

Or this:

Question by Sen. Al Franken (whose recent book I liked, by the way): “It seems likely that big business will probably push you to change the NLRB’s modernized election rule. If you’re concerned, I just wanted to point that out. … What I’m saying is that the unions should be able to vote sooner than 35 days. [then on to another subject]”

Sen. Patty Murray accused the nominees of “anti-worker, anti-union, even anti-NLRB measures” and characterized them as having “careers of fighting against workers’ rights.”  At least she did not dress up her remarks as a question, though. These were in a pre-published statement.

Sen. Maggie Hassan, a former corporate lawyer, was one of the few Senators to ask questions relating to independent contractor misclassification and joint employment. I should note too that her questions were legitimate questions, both topically and in the sense that they included actual question marks at the end.

Sen. Hassan asked Mr. Emanuel, “If you are confirmed, what steps will you take as a Board member to curb this epidemic of misclassification?”

Ok, “epidemic” is a bit loaded, but the bar is low here. Think pre-school obstacle course low.

Anyway, Mr. Emanuel did not take the bait. He responded, “I’m not sure I would agree with the characterization that it’s an epidemic. It does occur. … It’s like any other issue that comes before the NLRB. I would consider the facts of the case.” Jab, uppercut, duck, jab.

She then asked Mr. Kaplan if he thought the recent Browning-Ferris joint employment case was wrongly decided.  In keeping with the great tradition of non-answer answers (the perfect counterpart to non-question questions!), he declined to answer, instead acknowledging that it is up to the Board to determine the proper standard for joint employment under the NLRA.

And that’s about as exciting as it got, folks!

For those without C-SPAN access, StubHub may still have seats available to future hearings.  The secondary market for labor committee hearing tickets is white hot this time of year, especially with all the tourists in D.C.  The committees overcharge for popcorn, though.  Or so I’m told.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Two Key Developments in Joint Employment are Expected This Week

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This could be a busy week for developments in the joint employment area.

1) Congressional Republicans have begun drafting legislation that could change the definition of joint employment, Bloomberg BNA reports. Presumably the goals of a new bill would be (a) to add clarity to the standards for deciding who is a joint employer, and (b) to make it more difficult for workers or unions to claim they are jointly employed.

The scope of the proposed legislation is yet to be determined. It would most likely roll back the NLRB’s Browning-Ferris decision and restore the prior test for joint employment, requiring more substantial evidence of control. House Republicans have also hinted that they may broaden the scope of the proposed bill and address the standard for joint employment under federal wage and hour law (FLSA) and health and safety (OSHA) as well.

Key supporters of the proposed legislation include Rep. Bradley Byrne (R-Ala.), House Education and the Workforce Committee member, and Rep. Tim Walberg (R-Mich.), chairman of the Education and the Workforce Subcommittee on Health, Employment, Labor and Pensions. The U.S. Chamber of Commerce is involved in this effort as well.

A committee hearing entitled, Redefining Joint Employer Standards: Barriers to Job Creation and Entrepreneurship, has been scheduled for July 12, at 10:15 am.  It can be live-streamed on the web. Click here for more information.

2) On the following day, July 13, hearings are scheduled on the nominations of William Emanuel and Marvin Kaplan to join the NLRB. The hearings will take place before the Senate Health, Education, Labor & Pensions Committee. If recommended by the committee, the full Senate would then vote on the appointments.

If confirmed, these two new members would return the Board to a 3-2 Republican majority for the first time since the beginning of the first Obama administration.

The newly configured Board is likely to roll back the expansive Browning-Ferris decision, which made it substantially easier for workers to claim they are joint employees under federal labor law. Last week’s post about these nomination contains more detail.

I’ll provide further updates as new developments take place.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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New NLRB Nominations May Lead to New Joint Employment Test (or to my misuse of Lynyrd Skynyrd song lyrics)

IMG_1088In the Lynyrd Skynyrd song, “Gimme Three Steps,” we find our hero cutting a rug down at a place called The Jug with a girl named Linda Lou. This catchy song has nothing to do with labor law but does deal with someone who finds himself in a bad situation (shakin’ like a leaf on a tree!) and needs three steps to get out the back door.

Same thing here (in a sense). [C’mon, work with me here, I’m trying to make NLRB appointments interesting!]. When not posting tweets of himself pummeling a photoshopped CNN logo outside a WWE ring, President Trump found the time to make two important nominations to fill vacancies on the National Labor Relations Board (NLRB), giving companies two of the three steps needed to undo a long list of anti-business decisions from the past eight years.

The two new appointmnents, once confirmed, will shift the Board back to a 3-2 Republican majority, which should spell relief for businesses in several areas — including joint employment. (Two appointments = two steps. There’s a third step coming.  Wait for it….)

Nominee William Emanuel is a long-time employment defense lawyer who has made a career out of representing companies in labor disputes.

Nominee Marvin Kaplan is currently counsel to the Occupational Safety and Health Review Commission, an independent federal agency that rules on disputes over OSHA citations. He has served nearly a decade in various federal roles, including as Bush 43’s assistant secretary of labor for administration and management at the DOL.

Once confirmed, Emanuel and Kaplan will join current members Philip Miscimarra (R), Mark Gaston Pierce (D), and Lauren McFerran (D).

The rightward shift in the Board will likely bring relief to employers on a number of important labor issues, including the test for joint employment under the National Labor Relations Act (NLRA).

The Board’s landmark 2015 decision in Browning-Ferris (currently under appeal) redefined the test for joint employment, deeming workers to be joint employees under federal labor law even when a company exercises only minimal and indirect control over their working conditions. The reconstituted Board is likely to revert back to the prior joint employment standard, which required more direct control over how, when, and where work was performed before a company could be deemed a joint employer. (Of course, the D.C. Circuit Court of Appeals may take care of that itself by reversing the Browning-Ferris decision on appeal. A decision is expected before the end of the year.)

Meanwhile, one significant hurdle remains.  (As promised, loyal reader, here’s the third step.) The term of the NLRB’s General Counsel, Richard Griffin, does not expire until November 2017. As General Counsel, Griffin acts as the NLRB’s Chief Prosecutor. When his term expires, the appointment of a new General Counsel with a more pro-business outlook is expected.

The combination of two appointments to make a more pro-business Board, plus a more pro-business General Counsel, should finally bring relief to employers who have been battered by eight years of anti-business interpretations on issues like union elections, handbook policies, and social media. These rulings have been applied to union and non-union businesses, and so a more pro-business Board will be a welcome change to the business community.

Of course, it will take time for businesses to see the effects of a new Board and, later, a new General Counsel. The right cases and circumstances will need to arise, and then more pro-business interpretations can be issued. I blogged about this topic here a few few months ago, before we knew who the two new NLRB nominees would be. With the President’s two June 2017 nominations, we are two steps closer to these changes taking full effect.  (“That’s the break I was looking for.”)

Thank you, Ronnie Van Zant and Allen Collins, for helping me to try to make this blog post interesting and, most of all, for naming your band after a gym teacher.

© 2017 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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How Can There Be Misclassification When The Worker Prefers to Be an Independent Contractor?

Alan Hudock

Photo of Singer Dave Mason (We Just Disagree), by Alan Hurtock

Let’s start with this: Everyone is happy being an independent contractor until they’re not.

What do I mean by that? Right now, the relationship works. The contractor performs, and you pay for the work.

But what happens when things go south? As soon as you decide you no longer need those services, the contractor might stop being your BFF.

A disgruntled former contractor has some options, all of which involve some variation of this story: “Once upon a time, I was misclassified and should have been an employee.” None of the former contractor’s possible next steps are good for you: Continue reading

D.C. Court Doesn’t Fall for NLRB’s Lollipop Trick, Deems FedEx Drivers Independent Contractors

img_1042Act I, Scene 1

Location: Anywhere, USA

Boy: Can I have a red lollipop?

Mom: No, we’re eating dinner in half an hour.

Boy: (eats blue lollipop)

Mom: What are you doing? I said no!

Boy: I only asked about the red lollipop.

Too cute by half, right? Mom is no fool and easily sees through the simple trick. The boy is grounded.

Act I, Scene 2

Location:  D.C. Court of Appeals

NLRB: These FedEx drivers in Massachusetts are employees, not independent contractors.

D.C. Circuit (2009): No, they’re independent contractors.

NLRB: Ok, Connecticut then. The FedEx drivers in Connecticut are employees, not independent contractors.

D.C. Circuit (2017): Are you kidding me? We already ruled they are independent contractors.

NLRB: Last time I only asked about the drivers in Massachusetts.

Continue reading

Joint Employment Update: What’s The Status of Browning-Ferris and the NLRB?

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In August 2015, the NLRB rewrote the book on joint employment, declaring in the Browning-Ferris case that the right to exercise minimal control, even if not actually exercised, was enough to create a joint employment relationship.  (Read more here.) Previously, joint employment under the National Labor Relations Act (NLRA) required the actual exercise of a meaningful level of control.

But what’s happened since then? What happens next? What should employers expect in 2017 regarding joint employment under the NLRA?

Continue reading