Member Article

On August 27, 2015, the National Labor Relations Board (“NLRB” or the “Board”) issued its decision in Browning-Ferris Industries of California, Inc., upending decades of well-settled precedent to establish a new, broad standard for determining when two entities are “joint employers” under the National Labor Relations Act. 362 NLRB 186 (2015). This long-anticipated decision—issued by a three-member majority with two members dissenting—holds that an entity may be a joint employer of another entity’s workers based solely on reserved or indirect control over those workers’ terms of employment, even if that reserved or indirect control is attenuated or never exercised at all. The Board’s new expansive and ambiguous test has significant potential implications for businesses using contracted or outsourced employees, and may have significant implications for franchisors, who are also in the NLRB’s crosshairs in cases like the hotly contested McDonald’s, USA, LLC litigation.

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