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D.C. Circuit upholds Obama joint employment standard

  • December 28, 2018

D.C. Circuit upholds Obama joint employment standard

Word of the Week – Joint Employer

In a move certain to disappoint the business community, a federal appeals court today upheld an Obama-era test to determine whether the relationship between a business and the employees of its contractor or franchisee qualifies as joint employment.

The much-anticipated decision largely affirmed the NLRB’s 2015 Browning-Ferris ruling, which made it easier to classify a business a joint employer, jointly liable for any labor violations committed by a different business with which it’s affiliated.

A three-judge panel of the D.C. Circuit Court of Appeals split on the issue in an 80-page opinion that included a lengthy dissent.

The majority held that the board’s consideration of a business’s “right to control” over the worker in question had “deep roots in the common law.” The court also upheld the NLRB’s inclusion of “indirect control” in its test.

But the majority found the board’s chosen standard for indirect control was inconsistent with common law, and remanded the case for further consideration on that point.

The Trump administration has sought to roll back the Obama-era joint employment standard, which is opposed by franchisers. The administration published a proposed rule in September that would revert to the pre-Obama standard, which made it somewhat more difficult to hold franchisers liable for labor violations committed by franchisees.

The Trump NLRB rescinded the Obama-era standard a year ago but later reversed course amid questions of ethical misconduct involving a board member.

The two judges who ruled in the majority were Obama appointees. Judge Arthur Randolph, an appointee of former President George H.W. Bush, issued a scathing dissent.

“The majority opinion misstates the common law, misframes the questions in the case, and adds to the uncertainty the board’s Browning-Ferris decision has generated,” he wrote.