Volume 2, Issue 11 - June 15th, 2014

The National Labor Relations Board wants to turn the clock back 30 years to requiring companies to engage in collective bargaining that covers workers employed by subcontractors.

Since 1984 NLRB and courts have held that two entities constitute a “joint-employer” only if they share the ability to directly and immediately control or “co-determine” essential terms and conditions of employment, such as, hiring, firing, discipline, supervision and direction.

The board asked for friend-of-the-court briefs in a case where the Teamsters seek to represent lower-paid workers at a waste recycling plant who worked for a subcontractor of the plant’s operator, which itself directly employed higher-paid workers in more highly skilled jobs.

The union says the current standard allows the plant operator to engage in a “calculated restructuring” of employment and “insert” a contractor to “insulate” itself from its “basic legal obligation” to recognize and bargain with the union.

NLRB member Wilma Liebman wants to turn back the clock, holding that the current standard allows “the real party in interest – the entity that provides the capital that employees, in turn, make productive – to avoid the bargaining table.”

Liebman wants to return to the board’s pre-1984 standard “to find joint employer status in cases where the putative joint-employer exercised indirect control over the contractor’s wages and discipline,” she said, “and in cases where industrial realities made one company a necessary party to meaningful collective bargaining even though it played no role in hiring, firing, or directing employees.”

The law firm of Holland & Knight observes, “The NLRB will likely broadly expand the joint-employer doctrine in ways that would impair existing relationships among separate businesses that economically cooperate to achieve a mutually desired objective.”