By: Dan Cohen – 6/5/14
On May 12, 2014, the NLRB invited briefs from interested parties on the issue of joint employment under the National labor Relations Act. The NLRB’s invitation signals its intent to review and consider overturning established precedent. Under the Board’s current precedent (as stated in TLI, Inc., 271 NLRB 798 (1984)), joint employer status is based on whether each entity meaningfully affects employees’ terms and conditions of employment. The Board has requesting briefing on whether a new standard should be adopted and which factors should be considered, suggesting it may look to overturn this 30-year precedent. The case is Browning-Ferris Industries, Case No. 32-RC-109684.
In TLI, Inc., Crown Zellerbach Corp. (“Crown”) leased drivers from TLI, a nation-wide company that furnishes truck drivers to companies. Crown chose TLI in order to have its expertise in dealing with labor-management relations in the trucking industry, as well as to provide a buffer between itself and the drivers in the event of labor disputes. For this service, Crown paid TLI $23 per week per driver in addition to all costs of employment of the drivers including health and welfare, pension, fringe benefits, actual wages, mileage, workmen’s compensation and the like. Once on the job, drivers reported daily to the Crown facility for instructions on deliveries and returned their trucks there when they were finished. Mechanical and other problems on the road were reported to Crown rather than TLI. Crown notified drivers when they were required to work during their vacation. All driver logs and records were kept by Crown and only submitted to TLI for payroll purposes. Moreover, the drivers only worked for Crown and there had never been a transfer of a driver to another TLI job. The ALJ found that wages and other economic benefits were almost totally under Crown’s control because Crown attended collective bargaining sessions between TLI and its union and indicated that labor costs would have to be cut in order for Crown to remain competitive. Based upon these facts, the ALJ determined that Crown exercised operational control of the drivers and, therefore, shared with TLI the authority to make decisions regarding essential terms and conditions of employment as a joint employer.
The NLRB disagreed. According to the Board, although Crown exercised some control over the drivers, Crown did not affect the terms and conditions of employment to such a degree that it may be deemed a joint employer:
“The Crown foreman instructs the drivers as to which deliveries are to be made on a given day; however, the drivers themselves select their own assignments, on a seniority basis. The record indicates that Crown neither hires nor fires the drivers and, contrary to the judge’s finding, Crown does not discipline the drivers. When a driver engages in conduct adverse to Crown’s operations, Crown supplies TLI, not the employee, with an ‘incident report’ whereupon a TLI representative investigates. Disciplinary notices, or necessary actions, are issued by TLI. In addition, although accidents on the road are reported to Crown, it is TLI which investigates and determines whether or not the accident was preventable and whether further action is necessary. Our dissenting colleague would find that Crown’s participation in the daily operational activities of the drivers constitutes sufficient control over terms and conditions of employment to establish that Crown is a joint employer with TLI. We find, however, that the supervision and direction exercised by Crown on a day-to-day basis is both limited and routine, and considered with its lack of hiring, firing, and disciplinary authority, does not constitute sufficient control to support a joint employer finding.”
For the next 30 years, to establish joint employment in proceedings before the NLRB, there had to be a showing that the two entities “meaningfully affect[ ] matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.” Subsequent decisions clarified that an employer receiving contracted labor services will not become a joint employer by exercising authority to make routine directions such as where to do a job or what delineated tasks the subcontracted workers are to perform. Nor has the Board considered it determinative that the contracting employer witnessed misconduct and requested the end of a subcontracted workers assignment. These actions have been viewed as those of an owner exercising the right to protect its own premises.
The Browning-Ferris case threatens to modify this standard. In Browning-Ferris, the Teamsters sought to represent a unit of employees made up of Browning-Ferris employees as well as subcontracted workers employed by Leadpoint. The Regional Director found that the unit could only include Leadpoint employees because the two companies were not joint employers. The current Obama Board seeks to revisit the “meaningfully affects” standard that has been utilized extensively throughout the staffing industry to stave off bargaining units of both contract workers and the workers employed by the employer receiving the contracted services. My question is this: What is wrong with the current standard? The Board’s re-visit appears all too predictably designed to modify a standard in favor of one that will increase union membership.