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What's Browning-Ferris Got to Do With It?

In August 2015, the NLRB released its decision in Browning-Ferris Industries of California, Inc. In that case, Browning-Ferris Industries (BFI) worked with Leadpoint Business Services to contract out a number of its business tasks. Among other things, Leadpoint was responsible for interviewing, hiring, scheduling, supervising, evaluating, paying, disciplining, and terminating employees. BFI set the tasks employees were to do; Leadpoint handled everything else. It was understood that the workers were employees of Leadpoint, not of BFI.

When the Teamsters Union sought to organize Leadpoint's employees, it filed a petition for an election. In that petition, the union named BFI as a "joint employer." BFI argued that it had only indirect supervision over the Leadpoint employees – and that therefore it wasn't a "joint employer."

Employment Means Direct Control, Right?

Well, yes – but don't stop there. For years, a "joint employer" was one that had direct control and supervision over the workers at issue. BFI's argument in Browning-Ferris was based on the old rules. The NLRB, however, saw things differently.

Stating that "the Board's [current] joint-employment jurisprudence is increasingly out of step with changing economic circumstances," the NLRB concluded that a joint-employer relationship can exist even if an employer has only "indirect control" over an employee. In BFI's case, the NLRB found that "indirect control" existed because BFI: required drug screenings and safety compliance; participated in rehiring decisions; controlled day-to-day tasks, pay caps, and productivity standards for employees; and reserved the right to fire subcontracted or temp workers.

While the Browning-Ferris decision doesn't immediately have the force of law over other employers, it is expected to make huge changes in how other business relationships are treated in the future. For instance, the parallels between the employer-temp agency relationship and other relationships, like those between franchisors and franchisees, mean that the use of this decision by the NLRB and courts to make similar judgments in the future is likely.

Reducing the Risks to Your Company

What are the implications of this decision? Since it is fairly new, its full scope and impact have yet to be determined. In the meantime, however, here are several ways to help reduce your exposure as an "indirect employer" when including temporary staff in your business:

  • Go hands-off. Tell your staffing firm what the goals of each position are, but let the staffing firm decide how day-to-day tasks should be assigned in order to best meet those goals.
  • Educate. Show managers the Browning-Ferris decision and talk about its implications. Help them grasp the cost and liability consequences of creating a "joint employer" relationship, and give them concrete ways to avoid the appearance of such a relationship.
  • Review your contract with your staffing firm. Does it specify that you are not a co-employer? Who assumes the liability for costs or damages arising from the temp workers' relationship with your business? Also, consider giving up the unilateral right to discontinue the use of temp workers – this was one factor weighing against BFI in the Browning-Ferris decision.
  • Let your staffing firm do what they do best. Don't get involved in interviewing, hiring, firing, training, scheduling, or disciplining temp workers. Instead, communicate your needs and expectations clearly to your staffing partner, and let them use their expertise to put the right people in the right places.
  • Reevaluate the need for drug testing. The NLRB found that BFI's pre-assignment drug test policy demonstrated "significant control" over temp workers. Take a second look at your current drug test policy, and ask where it is – or is not – needed.
  • Report but don't recommend. If a temp worker is behaving inappropriately, let your staffing firm know right way – but don't give specific recommendations or instructions as to how to handle the behavior. Instead, choose a staffing firm whose disciplinary policies work for you.
  • Need additional help? Pick up the phone. Your lawyer can help you understand how the Browning-Ferris decision will affect your particular business, and your staffing partner can help you find ways to keep relying on the temp help you need without exposing yourself to unnecessary liability.

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