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NLRB Ruling May Define Who is Responsible for Subcontractors

Posted by Eric Kingsley | Aug 26, 2015 | 0 Comments

NLRB Ruling To Help Determine Who is Responsible for Treatment of Subcontractors in Joint Employer Relationships

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The National Labor Relations Board (NLRB) may rule by month's end whether or not Browning-Ferris Industries, a Houston-based waste-disposal company, is responsible for the treatment of its contractor's employees. If the NLRB concludes that Browning-Ferris is a joint employer of workers provided to the firm by a staffing agency, the company would be forced to collectively bargain with those employees and could be held liable for any labor violations committed against them.

A regional NLRB director initially ruled in favor of Browning-Ferris, which opposes the joint-employer designation. But the Teamsters union, which is representing the workers, is appealing the case to the National Labor Relations Board. The NLRB, which has a history of ruling against business during the Obama administration, is expected to overturn the decision and side with the workers. Observers believe the decision is likely to come before Republican board member Harry Johnson's term runs out at the end of the month.

Impact

A large number of industries would be impacted should the NLRB rule against Browning-Ferris–most notably those using a significant number of contractors such as retail, cleaning services, landscaping, manufacturing and hospitality. The Obama Administration is expected to continue to build on its list of executive actions to protect workers and wages–a move that would expose thousands of companies to new liabilities.

Supporters view a ruling against Browning-Ferris is a necessary step to protect a vulnerable class of temporary workers and independent contractors. But business groups fear the decision will wreak havoc throughout the private sector. One of those groups is led by Rob Green, executive director of the National Council of Chain Restaurants.  He feels strongly that this decision “[It] has the potential to change the entire way businesses operate in this country.” “There are so many business relationships in the economy that rely on companies providing services to other companies,” he added. “So you can imagine that any business sector could be impacted by the decision.”

Pending an anti-business and pro-employee ruling, businesses may begin to cut ties with staffing agencies that help recruit temporary workers, and subcontractors that provide janitorial and security services. These moves would bring those jobs in-house so the employee has more control over the employment situations.

Labor groups argue that the joint-employer designations are needed to cut down on the practice of using staffing agencies to provide “permanent temps.” Many companies allegedly exploit these relationships so they can shirk their responsibilities as employers. Under current labor law, companies are only liable for employees over whom they exert direct control by setting their hours, wages and job responsibilities. They can get around this requirement by working with staffing agencies to recruit temporary workers or hiring subcontractors to complete a job.

Have Questions About the NLRB's Pending Ruling?

An experienced California employment lawyer can quickly answer your questions about employee and contractor employment rights.  To discuss this issue or a potential claim on your behalf, feel free to contact leading California employment lawyers at Kingsley & Kingsley. Call toll-free at (888) 500-8469 or click here to contact us via email.

About the Author

Eric Kingsley

In practice since 1996, attorney and firm co-founder Eric B. Kingsley has litigated complex cases and authored numerous appellate briefs in both state and federal court on behalf of the California law firm of Kingsley & Kingsley, including over 150 class actions. Mr. Kingsley concentrates his pra...

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