Press Releases

News from EPI Attack on joint employer standard is an attack on collective bargaining

In a new report, EPI Labor Counsel Celine McNicholas and Associate Labor Counsel Marni von Wilpert examine the joint employer standard under the National Labor Relations Act (NLRA), and explain why a joint employer standard that reflects the reality of the modern workplace is essential to workers exercising their rights under the NLRA, and that any attack on a meaningful standard is an attack on workers’ rights to organize and collectively bargain.

“The political debate around this issue has been entirely orchestrated by corporate lobbyists, who have incorrectly framed this as an attack on small businesses—particularly franchisees—and pitted these business owners against workers,” said McNicholas. “In reality, workers and small business owners share a common interest in having large corporations at the bargaining table when those corporations exert control over factors like pay and scheduling practices. That is all the joint employer standard under the NLRA is about.”

When two or more businesses share control over workers’ terms of employment, such as pay, schedules, and job duties, those businesses may be considered joint employers. The joint employer standard under the NLRA was established over time by the National Labor Relations Board (NLRB), which consistently found a firm had joint employer status when it exercised or reserved control over significant terms and conditions of employment or when it was an essential party to meaningful collective bargaining. However, in 1984, the NLRB significantly narrowed the standard, making it easier for companies to avoid collective bargaining with workers.

Since the NLRB narrowed its joint employer standard, contingent and alternative workforce arrangements—reliance on temporary staffing firms and contractors to outsource services traditionally performed by in-house workers—have grown dramatically. The Board’s 2015 decision in Browning-Ferris Industries addressed this issue, requiring all firms that control the terms and conditions of employment to come to the bargaining table, ensuring that workers are again able to engage in their right to collective bargaining. The Browning-Ferris decision is currently on appeal in the United States Court of Appeals for the D.C. Circuit. Meanwhile, the NLRB Office of the General Counsel is currently litigating a joint employer case involving McDonalds.

“One of the primary purposes of the NLRA is to protect workers’ freedom to join together to negotiate the terms and conditions of their employment, and the NLRB is responsible for adapting the NLRA to the changing patterns of industrial life,” said von Wilpert. “Employers have altered the labor market by increasingly relying on staffing agencies and subcontracting arrangements as a means to procure workers, rather than hiring them directly. In Browning-Ferris, the NLRB simply followed its mandate to protect workers’ collective-bargaining rights in the growing contingent workforce economy, by requiring employers to follow the law by coming to the bargaining table and negotiating in good faith.”

McNicholas and von Wilpert point out that employers face narrow liability under Browning-Ferris. At most, the NLRB can order an employer to bargain with workers, to reinstate an employee fired in violation of the act, to pay back wages to a wrongfully fired employee, or to cease and desist from engaging in conduct that violates the act. Furthermore, under Browning-Ferris, the joint employer determination is a fact-based inquiry. This means that the board examines the specific circumstances of each case and reaches a determination based on those considerations. Nothing in the decision implies that all employers in a specific industry will be found to be joint employers under the NLRA.

“One of the reasons that wages have flat-lined over the past 35 years is because of the decline in workers’ ability to come together and negotiate,” said McNicholas. “This effort by corporate interests to distance employers from their workers and their responsibilities under the law is working as designed.”