House Democrats Ask NLRB To Clarify Joint Employer Issue

May 12, 2017

This week, 13 House Democrats asked the National Labor Relations Board to clarify its position on the joint employer issue regarding franchisors—which also has significant implications for contractor-subcontractor relationships.  The insurance of the letter suggests there could be bipartisan support for legislation to address the issue.  The letter asked about a 2015 Associate General Counsel memo, which said a franchisor was not a joint employer of workers at one of its franchise locations that came out just four months before the Board's Browning-Ferris decision, which greatly expanded the joint employer test under the NLRA.  Specifically, the letter asked the NLRB to clarify:

  • Whether the memo may be used as a blueprint for all franchise systems notwithstanding the joint employer standard established in Browning-Ferris; and
  • "How much flexibility will franchisors have to implement, articulate, and enforce brand standards before they are deemed to cross the line into the forbidden areas of 'indirect,' 'unexercised,' or 'potential' control for joint employer purposes?"
Key House Members are expected to introduce legislation clarifying when a joint employer relationship exists. Rep. Henry Cuellar (D-TX), who signed the letter, supported an appropriations rider in 2016, which would have blocked implementation of the Board's expanded joint employer rule.  Whether or not a GOP bill could attract bipartisan support may depend on how the NLRB responds to the Democrats' letter.  Separately, a courier for a company that delivers Amazon purchases accused both the trucking company he works for and the online retailer of failing to pay overtime.  The case highlights how the joint employer issue is much more than an NLRA and franchise concern and could affect many large employers.  According to the complaint, Inc. is liable as a joint employer because it exercises control by directing the routes drivers take and monitoring driver performance.