United States: The Board's New Math: Browning-Ferris And How 2=1

Last Updated: September 29 2015
Article by Mark W. Ford

Labor Day has come and gone but organized labor is still celebrating its significant victory in the NLRB's Browning-Ferris decision of August 27, 2015, which held that the individuals employed through Leadpoint were joint employees of both Leadpoint and Browning-Ferris for the purpose of collective bargaining.  To make matters worse, the NLRB election ballots were opened recently at the Browning-Ferris facility and the Teamsters buried the now joint employer BFI/Leadpoint by a tally of 73 to 17.  The Teamsters announced in something of an understatement that they are looking forward to "negotiating a contract" with the new joint employer "that will ensure the best working conditions" for its members.  Given that the member-employees in question were considered employees of Leadpoint until the NLRB's decision, the process of deciding which component of the new joint employer is responsible for which of the terms and conditions of employment shall assuredly regress into a circus.  It does not appear that the Board's thinking has evolved quite this far ahead.  Even the shape of the bargaining table (2-sided or 3-sided) has yet to be sorted out. 

The practical meaning of this expansion of the joint employer definition is significant.  An employer ("host") contracting with a staffing agency is almost certainly a joint employer if that relationship bears much resemblance to BFI and Leadpoint as described in the Browning-Ferris decision.  There, the staffing agreement between the parties was a traditional one:  Leadpoint screened, tested, hired, compensated, and disciplined its employees assigned to BFI.  Leadpoint also provided some supervisory control of its employees at the BFI worksite.  BFI established the work processes to be followed, the hours of work, specific work assignments, and productivity and safety standards to be observed.  In short, the relationship was a common one.  In its Browning-Ferris decision the Board was not terribly interested in which party to the agreement was formally responsible for the employees' terms and conditions of employment.  Rather the Board chose to focus on the degree of control each party had relating to those terms and conditions of employment.  "Discipline" of employees was one of many examples seized upon by the Board.  BFI did not discipline Leadpoint employees but in at least two instances effectively did "request their immediate dismissal."  As a result, both employees were immediately removed from their line duties and dismissed from further work at the BFI facility.  Bad facts make for bad law.  Moreover, the Board found that this outcome was "preordained" by BFI's contractual right in the staffing agreement to dictate who works at its operation.  

"Wages and Benefits" was yet another area where the Board moved beyond formalities and focused on its version of degree of control.  Yes, Leadpoint directly compensated its employees, but the Board determined that BFI played a significant role in fashioning those wages.  The "cost-plus" contract by which BFI reimbursed Leadpoint for labor costs plus a percentage mark-up was one factor demonstrating real control by BFI.  It was also left to BFI to first approve of any Leadpoint employee wage increases.  And, Leadpoint was specifically prohibited from paying its employees more than BFI employees performing comparable work.  Suffice it to say, the Board's Browning-Ferris decision ignored the legal niceties attendant to these staffing or temporary employee circumstances and made its case for joint employer status by casting aside existing law and skewing its factual analysis to fit its own "preordained" direction. 

So what does this mean?  First, the obvious:  staffing companies and so-called host employers alike must carefully review their agreements and, in all probability, revise and create new ones with an eye toward the Browning-Ferris decision.  This is the opportunity to distance the terms of the operating agreement as far as possible from many of those enunciated in the Board's opinion.  For example, the agreement should succinctly spell out the staffing agency's role as decision maker in the disciplinary process.  The host employer may report an employee issue, but the staffing agency must control the investigation and ultimate resolution of the issue presented.  This includes the staffing agency deciding on discipline and imposing that discipline, which may include reassignment of the employee and discharge, if necessary, or no discipline at all. 

It is also plain that the standard cost-plus method of doing business is not one to duplicate or continue in place.  Nor are provisions which forbid staffing agency employees from earning more than host employer employees performing substantially comparable work.  The same can be said about a clause in the agreement requiring the host employer's approval of any wage increases for staffing employees.  All of these elements and more were targeted by the Board in Browning-Ferris as demonstrating BFI's significant degree of control over Leadpoint's employees. 
These are just a few of the "takeaways" from the Board's opinion.   Additional distinctions to be made must be sifted from the operative facts identified by the NLRB as demonstrative of joint employer status.  The nature of the work to be performed should be analyzed.  If the work to be performed by the staffing agency employees can be realistically differentiated from that of the host employer's employees, this could prove to be an important distinction.  In essence, the agreement could spell out and compartmentalize the scope of the staffing employees' work as separate from that otherwise performed by the host employer.  And, although the Board was not impressed with the fact that Leadpoint employed supervisors on the job at BFI, those separate supervisors with a hands-on supervisory role may prove to be representative of something other than a joint employer.  Also, a broad indemnification provision taking into account the Browning-Ferris decision is imperative.  Existing boilerplate language in this regard may be insufficient to account for the Board's new direction. 

On a final note regarding the review and revision process to the underlying agreement, it requires a mutual understanding, or at least an inclination to agree, that this is a two way street.  Both the host employer and the staffing agency must understand that each is compelled to make real modifications to the relationship to avoid a joint employer determination.  There is no silver bullet, but a new operating agreement crafted to define the relationship in a manner distinguished from that in BFI/Leadpoint is a critical step. 

The proposed modifications to the disciplinary process addressed herein should be incorporated into the staffing agency's employee handbook.  The host employer's policy manual should also restate that its policies apply to only its employees and then clearly define eligibility.  Again, this is yet another opportunity to enunciate and underscore the independence of the staffing agency from the host employer and vice versa.  Work for the host employer is an "assignment" subject to the terms and conditions established by the staffing agency's handbook.  Staffing agency policies governing holidays, vacations, bereavement leave, personal leave, benefits, even work schedules, can and should be created to emphasize the objective and subjective lack of control over these terms and conditions by the host employer.  The concept at work here is to emphasize the relative independence of the two employers. 

The NLRB's decision in Browning-Ferris strongly suggests a very similar outcome in an upcoming decision where the relationship is that of franchisor-franchisee.  And some legal analysts view Browning-Ferris to extend to even contractor-subcontractor relationships.  To most, however, this is too much of a stretch.  Alarmists aside, the EEOC and other government agencies have already moved in the direction of the Browning-Ferris Board without significantly disturbing the traditional contractor-subcontractor arrangement.

If nothing else, Browning-Ferris signals the willingness of the NLRB to peer behind the curtain and evaluate the facts based on its view of what it identified as "industrial realities" as opposed to legal precedent.  And now, the BFIs and Leadpoints within this industrial reality are exposed to liability for the unfair labor practices of each other and to the union organizing drives against them both.  It is a matter of necessity to respond proactively to this seismic shift in labor law.  Revisiting the staffing agreement in place and reframing an employment handbook to clearly define independent employment policy and practice are essential first steps. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Duane Morris LLP
Morrison & Foerster LLP
Wilson Elser Moskowitz Edelman & Dicker LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Duane Morris LLP
Morrison & Foerster LLP
Wilson Elser Moskowitz Edelman & Dicker LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions