On Feb. 26, 2018, the National Labor Relations Board (NLRB or Board) issued an order reinstating the Browning-Ferris standard for evaluating joint employer status, once again leaving franchisors open to an increased risk of being found to be a joint employer of franchisee’s employees and potentially liable for labor law violations.
The Board’s 3-0 Order (Member Emmanuel did not participate) vacated its recent decision in Hy-Brand Industrial Contractors, Ltd. And Brandt Construction Co., 365 NLRB No. 156 (2017), which had overruled Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015). The Board’s Order is a direct result of a Feb. 9, 2018, report issued by NLRB Inspector General David Berry finding that Member Emmanuel should have been recused from Hy-Brand pursuant to Executive Order 13770, “the President’s ethics pledge,” which “prohibits an appointee from participating in a ‘particular matter involving specific parties’ when the appointee’s former employer or client is a party or represents a party.” According to the Inspector General, Hy-Brand was the same “particular matter” as Browning-Ferris because “the Board’s deliberation in Hy-Brand, for all intents and purposes, was a continuation of the Board’s deliberative process in Browning-Ferris” and “involved and affected the legal rights of the parties of Browning-Ferris.”