Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Browning-Ferris’

Should Workers Be Punished for Being Employed By Subcontractors? This Legal Battle Will Decide.

Thursday, January 10th, 2019

Over the last few decades, a growing number of American workers have effectively lost many of their labor rights because of the way their bosses structure the employment relationship. These workers are contractors who are hired by one company but work for another: the Hyatt Hotel housekeepers who actually work for Hospitality Staffing Solutions, the Microsoft tech workers who actually work for a temp agency called Lionbridge Technologies, and the Amazon warehouse workers who actually work for Integrity Staffing Solutions. These workers often perform the same work at the same place as other workers, frequently on a permanent basis.

But because their employers have entered into complicated contracts with each other, these workers have been unable to exercise their labor rights. If the workers can only bargain with the staffing company and not the lead company where they actually work, they are negotiating with the party that often has no power to change the terms of their employment. For that reason, workers have fought for a more inclusive definition under the National Labor Relations Act of what constitutes an employer—and when two employers are joint employers.

Recently, the Washington, D.C. Circuit Court of Appeals issued a major ruling that was a win for workers, and now this issue seems destined for the Supreme Court. As the legal battle heats up, workers everywhere should be paying close attention, since their livelihoods—or unions—could be affected.

Contracting expands as workers’ rights shrink

Under a traditional employment relationship, workers have one employer who has the power to hire, fire, pay, supervise and direct them. If such workers form a union, the law requires the employer to recognize the union and bargain in good faith. (Employers routinely violate the law and suppress workers’ labor rights, but workers at least have a theoretical path to collective bargaining.) Workers also have the right to picket and engage in other disruptive activities when they have a labor dispute with that employer.

However, there is a growing group of blue-collar, white-collar and service workers who find themselves working for two employers, either through contractors or temporary help firms. “In 1960 most hotel employees worked for the brand that appeared over the hotel entrance,” David Weil, former adminstrator for the Department of Labor Wage and Hour, explains in his 2014 book, The Fissured Workplace. “Today, more than 80 percent of staff are employed by hotel franchisees and supervised by separate management companies that bear no relation to the brand name of the property where they work.”

For those who work in a fissured workplace, organizing a union can be especially tough. The contracting firms have little power to raise wages or change working conditions, unless the company that controls the worksite agrees. Therefore, workers need both employers at the bargaining table.

Starting in 1984, the National Labor Relations Board (NLRB) began imposing difficult requirements to show that two employers are joint employers. By 2002, the NLRB was requiring that it be shown that the putative joint employer exercises direct and immediate control over employment matters. This meant that even when a company hired workers through a staffing agency to work at its site, chose the number of workers, gave specific work assignments and directions, and exercised supervision, it was not found to be a joint employer. Workers could, of course, form a union to negotiate with the staffing agencies, but those agencies usually have little room to maneuver alone.

Obama’s labor board

Recognizing this growing problem, in 2015 the NLRB changed the test to determine when two employers constitute a joint employer in its landmark Browning-Ferris Industries decision. No longer would workers have to show that both employers exercise direct control over them. Instead the NLRB recognized how power actually functions in the workplace and ruled that it would only require a showing that an employer had indirect or reserved control over the workers.

In its ruling, the NLRB recognized that for 30 years its approach to continuously adding requirements was moving in exactly the opposite direction from what was required: “As the Board’s view of what constitutes joint employment under the Act has narrowed, the diversity of workplace arrangements in today’s economy has significantly expanded.” And indeed, according to data from the Bureau of Labor Statistics’ most recent Contingent Worker Survey, there are approximately 2.3 million workers who work for contractors or temporary help agencies, and this figure captures only a portion of those that one could reasonably find have joint employers.

The NLRB’s new Browning-Ferris test looked at whether two employers actually share or codetermine employment matters by also considering reserved or indirect control. Therefore, an employer could no longer avoid its liabilities and obligations by structuring its power in an indirect fashion. James Hoffa, the president of the Teamsters, the union that represented Browning-Ferris workers, said at the time, “This decision will make a tremendous difference for workers’ rights on the job. Employers will no longer be able to shift responsibility for their workers and hide behind loopholes to prevent workers from organizing or engaging in collective bargaining.”

Similarly, employer-side attorneys recognized the scope of the decision. In their dissent in Browning-Ferris, NLRB Members Philip Miscimarra and Harry Johnson wrote that the decision was “the most sweeping of recent major decisions. Attorney Marshal B. Babson who represented the U.S. Chamber of Commerce in its opposition to this case, said at the time, “The decision today could be one of the more significant by the NLRB in the last 35 years. Depending on how the board applies its new ‘indirect test,’ it will likely ensnare an ever-widening circle of employers and bargaining relationships.”

The right strikes back

Reaction among corporate groups and Republicans was immediate, severe and comprehensive. Within two weeks, both House and Senate Republicans had introduced the Protecting Local Business Opportunity Act, which would amend the National Labor Relations Act to define joint employers as those who “directly, actually and immediately” exercise control. In 2017, the House passed its version of the bill in a vote that fell largely along party lines.

Once the NLRB came under Republican control and was presented with a case that touched upon the joint employer question, the NLRB, in the Hy-Brand case, overruled Browning-Ferris. This decision was so potentially damaging to workers that former NLRB Member and current executive director of the Labor and Worklife Program at Harvard Law School, Sharon Block, wrote that the decision constituted part of a “December Massacre.” 

But then, on February 9, 2018, the NLRB Inspector General issued a memorandum that determined that there was a “serious and flagrant problem and/or deficiency” in the NLRB’s deliberations surrounding the Hy-Brand case. Specifically, the memorandum found that Hy-Brand was effectively a “do-over for the Browning-Ferris parties,” and since NLRB Member William Emanuel’s former law firm represented Browning-Ferris in that case, he should have recused himself. Following this memorandum and Emanuel’s recusal, the NLRB unanimously vacated its Hy-Brand decision that overruled Browning-Ferris—and announced that Browning-Ferris was still good law.

The fight heats up

The Republican-controlled NLRB, intent on overturning the Browning-Ferris decision, decided to pass a rule redefining joint employers under its rarely used administrative rule-making authority. But since administrative rules require the agency to go through a series of steps and collect public comments, this rule will likely take years to become final. 

On December 28, 2018, the Washington, D.C. Circuit Court of Appeals, which, according to The New York Times, is “widely views as second in importance only to the Supreme Court,” released its long-awaited decision on the Browning-Ferris appeal. The Court issued an important and unqualified win for workers in affirming the NLRB’s 2015 Browning-Ferris decision, agreeing with the NLRB that its new Browning-Ferris test was firmly grounded in the common law. Using the unfortunate legal language of “master-servant,” the Court explained that “retained but unexercised control has long been a relevant factor in assessing the common-law master-servant relationship.”

The court fully affirmed the NLRB’s new Browning-Ferris joint employer test, but it sent the case back to the NLRB, because the NLRB did not fully apply its new test to all the facts of the particular case. This means that the NLRB must use its Browning-Ferris test going forward, which is good news for labor rights. 

The case is now headed to the NLRB, but that is unlikely to be the end of the road for this major issue. It is quite possible that this matter will eventually end up before the U.S. Supreme Court, and this should be cause for some concern among workers. The Supreme Court currently has an ultra-conservative majority, which has shown no hesitation in rewriting decades of law in support of employers in labor cases. As recently as 2014, the conservative majority of the Supreme Court engaged in a bizarre misreading of the definition of joint employer in order to deny labor rights to home healthcare workers. With the addition of Brett Kavanaugh, the Court has become more conservative since that time. Labor may have won this latest battle, but the fight is far from over.

This article was originally published at ThinkProgress on January 10, 2019. Reprinted with permission. 

About the Author: Moshe Z. Marvit is an attorney and fellow with The Century Foundation and the co-author (with Richard Kahlenberg) of the book Why Labor Organizing Should be a Civil Right.

Trump NLRB Appointee Behind Major Anti-Union Ruling Accused of Corruption

Thursday, January 25th, 2018

An anti-union policy decision from President Donald Trump’s National Labor Relations Board (NLRB) appointees appears to be tainted by a violation of ethics standards, and Sen. Elizabeth Warren (D-Mass.) is joining unions in demanding answers.

The Trump policy decision came on December 14 when the NLRB reversed an Obama-era ruling in the Browning-Ferris case—a pro-worker decision from 2015 that has been loudly decried by business lobbyists and conservative Republicans. The case turned on the issue of how the NLRB would define the term “joint employer” in union organizing cases—and was broadly viewed as a blow to McDonald’s and other fast food companies that exploit the franchise business model as a tool to help defeat unions. Last month, the five-member NLRB voted 3-2 in the Hy-Brand Industrial Contractors case to reverse Browning-Ferris, with recent Trump appointee William J. Emanuel providing the margin of victory for the anti-union forces.

Emanuel now stands accused by Warren and others of violating ethical standards by voting on the case even though he appears to have a conflict of interest. The conflict is said to arise from Emanuel’s former status as part owner (or “shareholder”) of the labor law firm Littler Mendelson, a business that specializes in representing employers against their own workers. The firm represented a party in Browning-Ferris, so standard government ethics rules indicate Emanuel should have recused himself from voting, according to critics.

“It looks really bad,” says Susan Garea, a California attorney representing Teamsters Local 350. Emanuel’s violation of ethics rules taints the NLRB vote, she tells In These Times, so the decision in Hy-Brand Industrial should be voided, and the validity of Browning-Ferris evaluated in an atmosphere free of conflicts of interest. Garea detailed her charges in a Jan. 4 court filing in the U.S. Court of Appeals for the District of Columbia Circuit. “It’s clear Emanuel should not participate,” in any vote on Browning-Ferris, she says

The Teamsters have been fighting the case for years. In 2013, Local 350 tried to organize workers at a recycling center in Milpitas, Calif., that was owned and operated by Browning-Ferris. But the union found itself blocked by a legal strategy that asserted the workers were actually employees of an outside staffing agency, Garea explains. The union fought the case before the NLRB, prevailed with the Board’s 2015 pro-union decision, and has been working ever since to fend off legal attempts to overturn the ruling. Garea, of the law firm Beeson, Tayer & Bodine, proclaims the case is far from over and the union is intent on blocking Emanuel’s improper action.

Warren entered the picture when Trump nominated Emanuel for the NLRB in mid 2017. She opposed him from the start, arguing that a lawyer who has represented only bosses in a 40-year-plus legal career was a bad choice for the NLRB, which is supposed to be a fair arbiter of labor disputes. She demanded a commitment from Emanuel to recuse himself from NLRB cases involving a long list of former clients (which he agreed to do) and voted against him in the final confirmation on the Senate floor.

“Emanuel is the opposite of what Senator Warren would like to see in an NLRB member. His conflicts of interest are a mile long, and he spent decades fighting against workers’ efforts to join together and stand up for themselves,” Warren’s Deputy Press Secretary Saloni Sharma tells In These Times.

The Senate floor vote on Emanuel reflected the deep party-line divide over Trump’s nominations to the NLRB. All the Democratic Party senators present voted against Emanuel, and all the Republicans voted for him. AFL-CIO chief lobbyist Bill Samuel tells In These Times that Trump’s appointments to government labor posts have been strongly anti-union, but Emanuel is one of the most extreme. “We didn’t make a fight about Emanuel. We just didn’t have the votes,” he says. “But we are very much behind Sen. Warren in her efforts to hold them [the NLRB members] accountable.”

In a letter dated Dec. 21, Warren posed questions to Emanuel raising concerns about potential misconduct in the Hy-Brand vote. “Given that your former partners at Littler Mendelson P.C. represented a party in [Browning-Ferris] before the board, did you recuse yourself from the board’s decision to move to remand the [Browning-Ferris] case from the U.S. Court of Appeals for the D.C. Circuit back to the board? If not, why not?” she writes. The letter, also signed by several other top Congressional Democrats, requests that Emanuel commit to additional recusals from pending NLRB cases in the future.

An unsigned email message stated that Emanuel “respectfully declines” a telephone interview to discuss the Warren allegations. Messages left directly with Emanuel were not returned.

Sen. Warren and other congressional Democrats are awaiting a formal response to the questions before deciding on the next step against Emanuel. Meanwhile, the White House is expected to announce it is nominating Washington, D.C., management-side attorney John Ring to fill an open seat on the five-member NLRB, as former Chairman Philip Miscimarra’s term on the Board expired just days after the Hy-Brand decision.

This article was originally published at In These Times on January 23, 2018. Reprinted with permission. 

About the Author: Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’s Daily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.

Workers’ rights dealt major blow as GOP-led labor board sides with McDonald’s

Friday, January 19th, 2018

In September, the National Labor Relations Board tilted to a 3-2 GOP majority for the first time in ten years. Thus began a series of Obama-era policy reversals that previously strengthened worker protections.

By December, the NLRB overturned the Obama-era “Browning-Ferris” rule. The landmark rule had made it easier for employees to hold companies liable for labor violations committed by franchise owners or contractors. Before Browning-Ferris, a company needed to have direct and immediate control over their employees. Overturning the rule had implications for a 2014 case brought against McDonald’s, one of the biggest franchises in the country.

The Trump Labor Board Just Made It Harder for Fast-Food Workers to Hold Corporate Bosses Accountable

Wednesday, December 20th, 2017

On December 14, the National Labor Relations Board (NLRB) overturned a 2015 policy that had made it easier for workers—particularly fast-food workers—to unionize and challenge their employers over unfair labor practices.

The Obama-era standard sprung from a 2013 case involving workers attempting to unionize at a recycling plant in Milpitas, Calif. The recycling company, Browning-Ferris Industries, owned the building but used a small staffing agency called Leadpoint to provide and manage workers. The local Teamsters union was trying to organize the employees, but it didn’t want to merely negotiate with Leadpoint: It wanted Browning-Ferris to be considered a joint employer and party to any labor contract. A regional director determined that Leadpoint was the sole employer, but the Teamsters requested a review, and the NLRB’s general counsel sided with union in a 3-2 vote.

The vote was hailed by unions and labor advocates for making it more difficult for corporations to distance themselves from certain legal violations—and for strengthening the bargaining power of subcontracted gig-economy workers.

The Browning-Ferris decision was also good news for fast-food workers and organizations like Fight for $15. Most fast-food companies use a franchising model, and Browning-Ferris made it easier for workers to hold corporations responsible for wage theft and union busting at individual locations. In 2014, the NLRB’s general counsel had already ruled that the McDonald’s Corporation could be considered a joint employer in various labor cases brought against the company’s franchises. But Browning-Ferris provided an entirely new legal dimension to the proceedings.

The Browning-Ferris decision was predictably criticized by industry groups, which immediately launched an all-out assault on the new rule. International Franchise Association lobbyist Matt Haller declared that the decision was “a knife-to-the throat issue,” pro-business organizations pressured Congress to block its implementation in their subsequent spending bill, and Browning-Ferris Industries challenged the decision in a federal appeals court.

Industry nervousness ended up being alleviated by the surprising election of Donald Trump, who successfully tipped the NLRB back to a Republican majority in September—and has sought to overturn the labor victories which occurred under his predecessor. The Trump administration recently ended Obama’s extension of federal overtime pay, and it’s preparing to eradicate a 2011 rule which protects the tips of wait staff. All of Trump’s NLRB appointees were connected to anti-union policies at their previous positions, but the confirmation process was fast-tracked, and they easily made it through GOP-controlled Senate. In overturning the Browning-Ferris precedent, the board claimed that the 2015 decision was responsible for “upending decades of labor law precedent and probably centuries of precedent in corporate law.”

In a statement, National Employment Law Project executive director Christine Owens called the reversal “just one more example of the Trump Administration favoring corporations over working people.”

“In this economy, employers are increasingly subcontracting out vital parts of their business to other contractors and/or using temporary employment agencies to fill vital positions,” said Owens. “The Browning-Ferris decision recognized that in these arrangements, companies that contract out work may still retain control over the conditions and standards that govern the work and how the workers doing the jobs are treated … the Trump NLRB has decided to let them off the hook.”

While there is no evidence that Trump was directly involved in the case, we do know that one his companies was impacted by the 2015 decision. In May 2016, catering workers at the Trump National Doral golf resort in Florida won a $125,000 settlement after suing for unpaid wages. As a result of the joint-employer liability, the workers were able to hold Trump Miami Resort Management responsible, even though an outside staffing agency had hired them.

It is likely that the Trump administration will soon work to overturn a number of additional Obama-era NLRB decisions. To the surprise of many, the board ended up adapting to the complexities of a changing economy under Obama and forcefully asserted the rights of workers in a number of important votes. Recent NLRB decisions have given graduate students the right to unionize at private universities, increased the bargaining power of workers at charter schools and made it easier for smaller groups of workers to unionize at companies. However, the term of the NLRB’s Republican chairman, Philip A. Miscimarra, ended just days after the board’s vote. Trump will at least have to wait until the Senate confirms his next nominee and reestablishes the Republican majority before he’s able to undo any of these changes.

This article was originally published at In These Times on December 21, 2017. Reprinted with permission.

About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria

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