United States: D.C. Circuit Rejects Labor Board Joint Employer Determination

Last Updated: August 10 2017
Article by Michael J. Lotito

On August 4, 2017, the U.S. Court of Appeals for the District of Columbia Circuit refused to enforce a holding by the National Labor Relations Board (Board) that the Cable News Network (CNN) was a joint employer.1 In the opinion, authored by Chief Judge Merrick Garland, the court found that the Board failed to adequately grapple with its conflicting precedent concerning what relationships constitute "joint employment."

Historically, CNN relied on service contractors to provide technical support, such as camera operators, sound and studio technicians, and broadcast engineers. These workers were represented by a union, the National Association of Broadcast Employees and Technicians. Beginning in 2003, CNN decided to move away from that approach and to directly hire these types of workers for two of its news bureaus. It terminated its service contracts and engaged in its own hiring process to fill the technical positions. Ultimately, the union and the Board's General Counsel filed complaints against CNN challenging its actions.2

The administrative law judge (ALJ) concluded that CNN had been a joint employer of the contractual employees prior to the termination of the service contracts. As a result, he found that CNN had been bound by the collective bargaining agreements with the workers' union. The ALJ held that CNN had violated the National Labor Relations Act because, while a joint employer, it had allegedly unlawfully terminated the service contracts and had failed to bargain with the union about that decision. The ALJ also found CNN liable as a successor employer for various purported violations. The Board upheld the ALJ's holdings on appeal and ordered certain remedies.3

The D.C. Circuit readily disagreed with the Board's conclusions about CNN's status as a joint employer. The court did not address any underlying evidence but flatly rejected the Board's joint employer holding as a legal matter. The court emphasized that the Board, citing two 1984 orders, identified the appropriate standard of review as to whether the asserted joint employers "share or codetermine those matters governing the essential terms and conditions of employment."4 As the court pointed out, after setting forth this standard, the Board acknowledged in a footnote that more recent precedent imposed a more stringent standard—which it did not apply—requiring "direct and immediate control." Despite identifying these inconsistent standards, the Board made no effort to explain its departure from existing precedent or otherwise eliminate the confusion.

The appellate court took issue with this omission, stating that "[s]ilence in the face of inconvenient precedent is not acceptable."5 In reviewing the Board's order, the D.C. Circuit distinguished the Board's skirting of the joint employer issue with the more deliberative approach it took in Browning-Ferris. As summarized by the court, the Board in Browning-Ferris reviewed its precedents, criticized the "direct and immediate" control standard, "forthrightly overruled those cases and set forth, as a 'a new rule' for identifying joint employment, a standard quite similar to the one the Board" used in the CNN dispute.6 According to the D.C. Circuit, the Board could rightly revise the standard in that fashion "as long as it provide[d] a reasonable explanation for its change of course."7 Of course, as the court recognized, the question of whether Browning-Ferris itself provides such a reasonable interpretation remains pending before another panel of the D.C. Circuit.

In the absence of such analysis and explanation, however, the court refused to endorse the Board's summary adoption of the indirect joint employment standard in the instant matter.8 To the contrary, the D.C. Circuit denied the Board's request for enforcement of its order as to the company's status as a joint employer and relieved it of any associated liability.9 While this ruling does not affect the ongoing Browning-Ferris appeal, it reiterates the limits placed on the Board's authority to implement new interpretations.

Footnotes

1. N.L.R.B. v. CNN Am., Inc., No. 15-1112, Docket No. 1687320 (Aug. 4, 2017).

2. Id. at 3–5.

3. Id. at 5–6; see also CNN Am., Inc., 361 N.L.R.B. No. 47 (2014).

4. CNN Am., Inc., No. 15-1112, at 8 (internal quotation omitted).

5. Id. at 12 (internal quotation omitted).

6. Id. at 10.

7. Id.

8. Id. at 8–13.

9. The D.C. Circuit affirmed the Board's conclusion that CNN was a successor employer.

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