Scott Statement on NLRB Decision in Browning-Ferris Industries

Statement

Ranking Member Robert C. "Bobby" Scott (VA-03) praised today's 3-2 decision by the National Labor Relations Board in Browning-Ferris Industries, which returned to the traditional test for determining whether two or more entities are joint employers under the National Labor Relations Act.

"Today's NLRB decision will help ensure that the National Labor Relations Act continues to protect the rights of employees to bargain with their employers -- whether those employers individually or jointly control their wages and working conditions. The Board's decision returns to the traditional joint employer test the Board had long applied until 1984, when a Reagan-era Board adopted a narrower test. That narrower test required an entity to have "direct and immediate control' over the terms and conditions of employment to be considered a joint employer. Under that narrower test, far too many employers have sidestepped their responsibility to bargain with their employees and assume liability when they engage in unfair labor practices.
"The traditional joint employer test that the Board returns to today is based on common law principles. It examines whether a business exercises direct or indirect control over another's employees, or whether it has the potential to exercise such control.
"Today, businesses increasingly outsource employment to employee staffing and leasing firms and temporary employment agencies, which allows them to avoid taking responsibility for the workers who produce the goods and provide the services from which they profit.

"While there has been speculation that the Board's decision could upend the franchise business model, it is worth noting that franchised businesses were successful under the traditional joint employer test that was in place prior to the narrowed test the Board adopted in 1984. And if franchisors refrain from asserting control over their franchisees' employment arrangements, they will readily avoid joint employer liability. It is noteworthy that in a separate matter, the NLRB General Counsel found that Freshii, a fast food franchisor, was not a joint employer with respect to its franchisees. A memorandum issued by the General Counsel found that Freshii imposed requirements on its franchisees that maintained brand standards, such as "design, decoration, and décor,' but since it did not set policies regarding hiring, firing, disciplining or supervising employees, wages, benefits or schedules, or dealing with unions, it was not a joint employer.

"Employees deserve a meaningful opportunity to bargain by having all of the employers who determine their terms and conditions of employment at the table. Today's decision puts that opportunity back on the table."

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