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Federal Agencies Heighten Focus on Joint Employers as the Sharing Economy Expands

March 11, 2016
Attorney At Law Magazine - Minnesota Edition
Author: Mary L. Knoblauch

The U.S. Department of Labor (DOL) recently joined the National Labor Relations Board (NLRB) to expand who will be considered a “joint employer” and therefore, responsible for violations of the laws these federal agencies enforce.

Business owners of all sizes – especially those who participate in the sharing economy as well as franchisors and companies hiring workers through staffing agencies – need to pay close attention to both the NLRB’s recent decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015) and an administrative guidance from the DOL issued Jan. 20, 2016. The message is clear from the NLRB and the DOL. Both agencies intend to “modif[y] the legal landscape for employers” as the NLRB stated in Browning-Ferris and take a broad stance on the concept of joint employment to hold more businesses liable under employment and labor laws.

In Browning-Ferris Industries (BFI), the NLRB set out a new and more expansive test to determine joint employer status for purposes of the National Labor Relations Act. BFI (the host employer) had a traditional staffing agreement with a staffing agency named Leadpoint who provided workers for a variety of tasks at a recycling facility owned by BFI. Leadpoint screened, tested, hired, compensated and disciplined its employees assigned to BFI and the staffing agency also provided some supervisory control of its employees at the BFI worksite. BFI assigned the work to be done, scheduled the hours of work, set productivity and safety standards, and had the right to reject any employee or “discontinue the use of any personnel for any or no reason.” A local union filed a petition to represent Leadpoint’s employees and claimed that BFI was a joint employer with Leadpoint and should therefore, be required to engage in collective bargaining with the Leadpoint employees. Read more.