When running a business, regardless of the industry,
determining how you are liable for your employees’ wages is an integral part of
the operations. As an employer, you are required to know if any of your
employees are working and receiving benefits somewhere else in addition to your
company. Joint employment, wherein two or more employers employ the same
person, can complicate the issue of liability. Two companies that are joint
employers are each responsible for things such as employee compensation and hours.
The standard for joint employment was changed last year in the National Labor
Relations Board (NLRB)’s decision in the case of Browning v. Ferris, which expanded
the range of claims for which corporations and franchisers could be liable.
Labor and employment attorney Robert L. Boreanaz spoke to the Buffalo Law
Journal about the changes and how they could affect businesses. The full story
is available on the Buffalo Law Journal website.
Implications of NLRB's Decision
According to the Buffalo Law Journal, the implications of
Browning v. Ferris could impact employers in several different industries, such
as construction, health care, home care, and manufacturing, as well as
government entities and private providers, which use workers whom they do not
directly employ. Mr. Boreanaz told the Law Journal that, in reality, the change
is not very radical and the new standard is fairly well-aligned with common law
used in other employment law situations. “Generally speaking, right now
employer groups are just reacting to the change, which shifts the standards,”
he said. “There is really no difference for the employer in the discrimination
areas, the Fair Labor Standards Act, the Family and Medical Leave Act, or even
the Occupational Safety and Health Administration.”
Contracts should be reviewed carefully
The Buffalo Law Journal reports that the new ruling could
subject organizations and franchisers to claims from employees and subsidiary
corporations. Mr. Boreanaz explained that Browning v. Ferris changed a
three-decades-old standard. Before this decision, employers such as general contractors,
franchisers, and staffing companies attempted to avoid liability for their
joint employers’ business practices. He went on to say that this new standard
means that potential joint employers should review contracts between them more
carefully than they may have in the past. This can help to ensure that each
party has the necessary policies in place to limit mutual involvement. The
Equal Employment Opportunity Commission (EEOC) issued an amicus brief in
support of the NLRB’s ruling, stating that the common law standard has worked
well and should be used more broadly. The decision in Browning v. Ferris is
currently in the District of Columbia Circuit Court on appeal.
Corporations as joint employers for franchises
Another case that has arisen in connection with the changes
in joint employment has to do with McDonald’s. According to the Buffalo Law
Journal, the NLRB is hearing a case involving the corporation regarding whether
it is to be regarded as a joint employer for all of its franchises. Mr.
Boreanaz said that this case raises a number of questions, including who is
responsible if the National Labor Relations Act is violated and who would speak
on behalf of the employer in union negotiations. The Buffalo Law Journal
reports that the contracts McDonald’s uses give the company distinct rights and
powers over its franchisees and that some are claiming this makes the
corporation a joint employer in bargaining and violation situations.
“McDonald’s is what we call in the industry a heavy-handed franchiser, meaning
their involvement is maybe more than others. They require strict standards, and
that’s what’s of importance here,” Mr. Boreanaz explained. “We’re going to see
how this new standard plays out.”
About Robert L. Boreanaz
Mr. Boreanaz, a member of Lipsitz Green Scime Cambria’s Labor and Employment Practice Area, focuses his on union-side labor law and plaintiff-side employment law. He has extensive trial experience, arguing before state, appellate, and federal courts.
This article does not purport to give legal advice and is for informational purposes only.