1. Avoiding “joint employer” status and liability
under newly adopted federal agency standards –
Last year, the National Labor
Relations Board (NLRB) overhauled the test to determine whether two (or more)
employers are “joint employers” for purposes of labor law, with its Browning-Ferris
Industries decision. The new test
makes it much easier to establish joint employer status and is now being used
to pursue claims against McDonald’s Corp. for the actions of its franchisees. The NLRB’s test is being used to hold
multiple employers liable for unfair labor practices committed by one, as in
the case of McDonald’s Corp. as a joint employer with its franchisees. Joint employer status may also be used to
impose collective bargaining and union contract obligations, as well as
determining whom can be subjected to picketing and other strike activity or economic
pressure, from unions.
The Department of
Labor (DOL) recently issued its own definition of “joint employers,” amid allegations
from some United States Congressmen of collusion between the two agencies. Although some of the factors in the two tests
are similar (the DOL definition is actually broader than that of the NLRB), the
consequences of finding a joint employer relationship by the different agencies
differ significantly. The DOL’s guidance
is relevant for the Fair Labor Standards Act (FLSA) and the Migrant and
Seasonal Agricultural Worker Protection Act (MSPA). Under these laws, the hours worked for joint
employers will be aggregated for purposes of determining if an employee has
worked overtime during a workweek. In
either case, both joint employers will be jointly liable for any violations
under these laws.
Because of the severe
ramifications at stake and the current heightened focus on the issue, we highly
recommend that employers make the New Year’s resolution of auditing any
potential joint employment relationships with the help of someone knowledgeable
in these areas.
