NLRB Proposes New Rule on Joint Employer Standard

Q.  What is the current rule for determining whether two employers are considered to be “joint employers” under the National Labor Relations Act?

A.  On September 14, 2018, the National Labor Relations Board (NLRB) proposed a new regulation that would make it more challenging to establish joint employer status under the National Labor Relations Act. The proposed rule dictates that two entities will be joint employers only if each exercises substantial direct and immediate control over employees.

As we reported previously, in 2015, the NLRB significantly relaxed the standard for proving that two entities are joint employers in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015). In Browning-Ferris, decided during the Obama administration, the NLRB ruled that entities could be joint employers even if one had only indirect, limited and routine control or the unexercised right to control employees’ terms and conditions of employment. The NLRB reversed course in December 2017 during the Trump administration, overruling Browning-Ferris and reinstating the standard for joint employer status that had existed previously – that entities are joint employers only if each has exercised direct and immediate control over employees. See Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017). The Hy-Brand ruling was short-lived, however. The NLRB vacated that ruling earlier this year due to the conflict of interest of one of the NLRB’s members who participated in the decision. In the meantime, a petition for review of Browning-Ferris is pending in the D.C. Circuit Court of Appeals.

Now, the NLRB seeks to establish a stricter joint employer standard by regulation. Doing so would add more permanence to the joint employer standard than interpreting it through case law, which often changes from one presidential administration to the next. The NLRB explained in its Federal Register notice that it would benefit from public comment on the joint employer standard “given the recent oscillation on the joint-employer standard, the wide variety of business relationships that it may affect (e.g., user-supplier, contractor-subcontractor, franchisor-franchisee, predecessor-successor, creditor-debtor, lessor-lessee, parent-subsidiary, and contractor-consumer), and the wide-ranging import of a joint-employer determination for the affected parties.”

The NLRB’s proposed rule enunciates the following test for joint employer status:

An employer, as defined by Section 2(2) of the National Labor Relations Act (the Act), may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction. A putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.

The NLRB included 10 examples with the proposed rule “to help clarify what constitutes direct and immediate control over essential terms and conditions of employment.” For example, the NLRB concluded that the following scenario reflects one company’s direct and immediate control over another company’s employees: Company A supplies labor to Company B and, pursuant to the contract between them, Company A is required to pay a particular wage rate. In that situation, Company B exercises direct and immediate control over wage rates. In another example, a franchisor requires its franchisee to operate the franchisee’s store between specified hours. The franchisor does not exercise direct and immediate control over the essential terms and conditions of employment of the franchisee’s employees because the franchisor is not involved in scheduling the franchisee’s employees or in determining shift durations.

The NLRB’s proposed rule will now go through the time-consuming rulemaking process. As employers wait for the publication of a final rule, companies can minimize the risk of joint employer status by avoiding involvement in decisions regarding another company’s employees, including decisions regarding pay, hiring, discipline or termination.

–Susan K. Lessack

 

Profanity-Laced Social Media Posts May Be Permissible in the Context of a Union Organizing Campaign

Q.  Can I fire an employee for making disparaging comments about the company and its supervisors on social media?

A.  According to a recent Second Circuit opinion, if the social media post was made in the context of union organizing activity, then the answer likely is no. The National Labor Relations Act (“NLRA”) prohibits employers from terminating an employee based on that employee’s union-related activity. If the employee’s protected activity rises to the level of “opprobrious” or abusive conduct, however, it could lose the protection of the NLRA.   Nonetheless, the standard for a finding that the employee engaged in “opprobrious” or abusive conduct is quite high.

In NLRB v. Pier Sixty, LLC, an employee posted a Facebook message encouraging other employees to vote for the union and referred to his supervisor as a “loser” and a “motherf*cker.” The employee even went to so far as to disparage the supervisor’s family, posting:  “F*** his mother and his entire f***ing family!!!!”

The NLRB found that the comment did not rise to the standard of “opprobrious” conduct because it was made in the context of an upcoming union election. The Second Circuit agreed. According to the court, even though the employee’s message was dominated by vulgar attacks on the company’s supervisor and his family, the “subject matter” of the message included workplace concerns – management’s allegedly disrespectful treatment of employees and the union election. The court also noted that the company had demonstrated hostility toward the employees’ union activities, including threatening to rescind benefits and/or fire employees who voted for the union and enforcing a “no talk” rule preventing employees from discussing the union.

Further, the court considered it important that the company had tolerated profanity in the workplace on a daily basis, issuing only five warnings in six years and not discharging anyone for using profanity prior to the employee at issue. In addition, the court said that the supervisors, including the one whom the Facebook post was directed at, cursed at employees including using the “f” word on a daily basis. The court concluded that “it is striking that Perez – who had been a server at Pier Sixty for thirteen years – was fired for profanities two days before the Union election when no employee had ever before been sanctioned (much less fired) for profanity.”

Finally, and most disturbingly for companies trying to maintain their online reputations, the court concluded that, while Facebook posts may be visible to the entire world, “Perez’s outburst was not in the immediate presence of customers nor did it disrupt the catering event.” Calling the case as sitting at the “outer bounds of protected, union-related comments,” the Second Circuit upheld the NLRB decision.

So, what does this mean for companies trying to maintain a professional workplace?

First, it crucial to apply discipline consistently.  If Pier Sixty had discharged other employees for using profanity outside of the union-organizing campaign – and prohibited its supervisors from cursing at staff – it would have had a much stronger argument that the Facebook message should not be tolerated.

Second, employers should tread carefully – and consult with counsel – before disciplining employees for social media activity, particularly in the context of union activity.

Tracey E. Diamond