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A recent decision of the National Labor Relations Board (NLRB) greatly expanded the definition of “joint employer” in the context of the relationship between unions and management (Browning-Ferris Industries of California Inc., 362 NLRB No. 186).
Under the board’s new test, two or more otherwise-unrelated employers may be found to be a joint employer of the same employees if they “share or co-determine those matters governing the essential terms and conditions of employment.” Reserving authority to control the terms and conditions of employment, even if not exercised, is clearly relevant to determining whether there is joint employment, the board said.
The decision greatly expands the types and number of entities that can be held responsible for unfair labor practice violations and that may be held to have collective bargaining obligations regarding employees of a totally separate, independent employer.
The impact of this ruling is most likely to be felt by franchisors that do not exercise day-to-day control over their franchisees, and by employers that rely on staffing agencies or contractors to provide their workers, and those agencies and contractors themselves.
But does the decision have ramifications beyond the labor relations context?
Liability Under OSH Act
The board’s decision may also expand liability under the Occupational Safety and Health Act (OSH Act), according to James Curtis, an attorney in Seyfarth Shaw’s Chicago office. Under the act’s multi-employer policy, an employer could already be cited for hazards to other employers’ employees if the Occupational Safety and Health Administration (OSHA) found that the employer controls the hazard or is responsible for creating the hazard or correcting the hazard. Accordingly, “controlling employers” have already faced potential liability. However, Curtis said, the NLRB decision may allow OSHA to further expand controlling liability to employers who really have little or no actual control over workplace safety.
For example, a number of ongoing inspections show that OSHA seems intent on using the NLRB decision to expand liability to franchisors when franchisees have been found to have violated the act, Curtis said.
Any employer that uses franchise agreements should carefully consider the potential impact of the NLRB decision on its potential liability in the safety and health area, Curtis concluded.
Staffing Agencies and Contractors
And in the case of staffing agencies, “While the Occupational Safety and Health Act’s definition of ‘employer’ is not identical to the definition in the National Labor Relations Act, there can be no doubt that the NLRB’s Browning-Ferris decision is likely to influence OSHA’s approach to inspections and citations involving temporary or contract employees,” said Valerie Butera, an attorney in Epstein Becker Green’s Washington, D.C., office.
She noted that when OSHA’s temporary employee initiative was announced in 2013, Assistant Secretary of Labor for Occupational Safety and Health David Michaels declared that “Temporary staffing agencies and host employers share control over the employee, and are therefore jointly responsible for temp employees’ safety and health. It is essential that both employers comply with all relevant OSHA requirements.”
However, up until now, although inspections under the temporary employee initiative have sometimes resulted in citations being issued to both the host employer and the staffing agency, usually only the host employer has been cited because it has been perceived as having a greater ability to control or prevent the temporary employee’s exposure to a hazard, Butera said. Should OSHA adopt the reasoning of the Browning-Ferris decision, “this trend will surely change, significantly increasing staffing agencies’ exposure to OSHA citations even when the staffing agency had no control over the workplace or awareness of the hazard,” she said.
Similarly, contractors will face increased exposure to OSHA citations if OSHA chooses to follow Browning-Ferris, Butera said. Under the agency’s multi-employer worksite citation policy, OSHA may cite an employer for hazards that other employers’ employees were exposed to when OSHA finds that the employer controlled the hazard, created the hazard or was responsible for correcting the hazard. Applying the reasoning of Browning-Ferris to this policy could considerably expand the number of employers cited, treating multiple contractors as controlling employers regardless of whether they had any real control over the hazards at the worksite, she concluded.
OSHA Has Taken Broad View
The NLRB’s new test means that in determining whether or not an employer will be found to be a joint employer, the focus will be on “not just the authority you exert, but how much power you potentially have,” Patty Ogden, an attorney in Barnes & Thornburg’s Indianapolis office, told SHRM Online.
“While the decision from the NLRB standpoint has reversed decades of established law concerning when employers would be joint employers” under the National Labor Relations Act, it is unlikely to have a great impact on OSHA’s regulation of workplace safety, according to Ogden.
In recent years, OSHA has taken a very broad view of who is an employer, she noted. In the case of temporary employees working on a jobsite, if a safety violation is found, the agency will often cite both the site employer and the temporary agency.
If there is a contract between the temp agency and the site employer, OSHA inspectors will look at that to see how control over the workers has been defined in the contract, she added.
Similarly, if contract workers are onsite, OSHA can cite both the general contractor and the site owner, depending on which entity created the hazard at issue.
“OSHA has been more liberal in defining employer [than has the NLRB], particularly in the construction area,” Ogden said, so whether the Browning-Ferris decision leads to an even greater expansion of who is an employer under OSHA “remains to be seen.”
Joanne Deschenaux, J.D., is SHRM’s senior legal editor.
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