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Joint Employment Becoming Major Business Issue

November 23, 2016 by Lipsitz Green Scime Cambria LLP

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.

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