United States: NLRB Rejects Browning-Ferris And Returns To Prior Joint-Employer Standard That Benefits Union And Non-Union Employers Alike

Last Updated: December 21 2017
Article by Alan I. Model and Brendan Fitzgerald

On December 14, 2017, just two days before the end of Chairman Philip Miscimarra's term, the new Republican majority at the National Labor Relations Board continued its shift in labor policy and issued yet another reversal of significant Obama-era precedent. Specifically, the Board issued a 3-2 decision in Hy-Brand Industrial Contractors, Ltd.1 ("Hy-Brand"), which rejected the controversial Browning-Ferris2 decision and returned to its prior test for joint employers.

Browning-Ferris represented a significant departure from decades of Board precedent regarding the standard for determining whether two entities are joint employers. Under Browning-Ferris, two entities would be deemed joint employers based on the mere existence of reserved joint control, indirect control, or control that is limited and routine. This was in stark contrast to the prior standard, which required the putative joint employer to exercise control over essential employment terms, with such control being "direct and immediate."3 The Browning-Ferris decision drastically increased the universe of potential joint employers and was the subject of intense negative scrutiny, including congressional hearings geared toward overturning the decision.

In Hy-Brand, the Board clearly articulated a return to the standard of requiring proof of the actual exercise of control over essential terms of employment:

[A] finding of joint-employer status shall once again require proof that putative joint employer entities have exercised joint control over essential employment terms (rather than merely having "reserved" the right to exercise control), the control must be "direct and immediate" (rather than indirect), and joint-employer status will not result from control that is "limited and routine."

The Hy-Brand decision offers a sigh of relief for employers with both unionized and non-union workforces. For the past two years under Browning-Ferris, employers were compelled to restructure their commercial agreements to attempt to eliminate any potential claim by the NLRB that such language may evidence potential (reserved or indirect) control over a workforce (even when the entity had no direct involvement with the workforce). Some employers chose to make major changes (e.g., requiring separate on-site supervision) and minor changes (e.g., prohibiting temps from wearing company t-shirts or uniforms) to their operations to reduce the risk of a perceived joint-employer relationship and resulting finding. Still other employers chose to eliminate using temporary employment agencies or subcontractors altogether, even though operationally beneficial, to avoid getting caught in the NLRB's cross-hairs on this issue.

The Hy-Brand Decision

Wasting little time with a newly comprised Republican majority, the Board repudiated Browning-Ferris, referring to it as "a distortion of common law" that was "contrary to the Act," "ill-advised" and a decision that fostered instability in labor-management relations. The majority also criticized Browning-Ferris for subjecting countless entities to joint-employment obligations, even in the absence of direct and immediate control from the putative joint employer. In short, the decision essentially turned Member Miscimarra's dissent from Browning-Ferris into the majority decision of the Board.

The Board set forth numerous rationales for rejecting Browning-Ferris, including:

  • Browning-Ferris exceeded the Board's statutory authority. Browning-Ferris relied upon theories of "economic realities" and "statutory purpose" that improperly extended the National Labor Relations Act's ("Act") definitions of "employee" and "employer." Browning-Ferris also went far beyond the common law it is bound to apply.
  • Browning-Ferris relied upon an incorrect view of our current economy. Browning-Ferris wrongly relied upon the notion that current business conditions are unique to our modern economy. However, subcontracting, outsourcing and other temporary employment have existed since before the passage of the Act.
  • Browning-Ferris was based upon a misreading of Board precedent. Browning-Ferris purported to return to the "traditional" joint-employer standard that existed before two 1984 decisions, TLI and Laerco. However, in cherry-picking the precedent it relied upon, the Browning-Ferris majority neglected decisions where no joint-employer relationship was found, despite the existence of indirect control.
  • The Browning-Ferris test was an unpredictable, ill-defined standard that imposed "unprecedented" bargaining obligations, fostered labor instability, and created unresolvable legal uncertainty. "Our fundamental disagreement with the Browning-Ferris test is not that it treats indicia of indirect, and even potential, control to be probative of joint employer status, but that it makes such indicia potentially dispositive without any evidence of direct control in even a single area. Under the common law, in our view, evidence of indirect control or contractually-reserved authority is probative only to the extent that it supplements and reinforces evidence of direct control." Because Browning-Ferris gave employers essentially no guidance, the Board could find joint-employer status because of "reserved" or "indirect" control of virtually any term or condition of employment.

Given these concerns, the Hy-Brand majority returned to a more concrete and defined joint-employer test, which focuses on whether an alleged joint employer "meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction."

The basis of the [joint-employer] finding is simply that one employer while contracting in good faith with an otherwise independent company, has retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer. Thus, the 'joint employer' concept recognizes that the business entities involved are in fact separate but that they share or co-determine those matters governing the essential terms and conditions of employment.

Upon announcing the reversion to the Board's prior test, the Hy-Brand majority also announced that this joint-employer standard would be applied retroactively to the case in front of it (as well as all other pending cases). The Board then found the record established that the two entities at issue, Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., were joint employers because both entities exercised joint, direct and immediate control over employees.

Practical Implications

Without a doubt, the Hy-Brand decision is significant for those entities in a franchisor-franchisee relationship, businesses that use temporary workers to supplement their workforces or a means of onboarding through a "temp to perm" process, contractors that subcontract portions of their work on jobsites, and organizations that engage a third party to provide labor or perform a task.

Despite the Hy-Brand decision, the future of the joint-employer analysis is not set in stone. The Hy-Brand decision may be appealed to the court of appeals. Also, the appeal of Browning-Ferris remains pending before the U.S. District Court for the D.C. Circuit, although the NLRB's new General Counsel may file a motion to remand the case to the Board in light of the Hy-Brand decision. Moreover, the Save Local Business Act, which passed the U.S. House of Representatives on November 7, 2017, seeks to amend the NLRA and Fair Labor Standards Act to narrow the joint-employer relationship to only those situations where "such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment."

While employers may breathe a sigh of relief in light of Hy-Brand, it remains prudent to assess how best to engage or contract with other businesses to ensure against a joint-employer finding. Oftentimes, businesses properly establish written agreements and protocols sufficient to create an arms-length relationship with separate businesses, only to find that a local management team responsible for implementation of the relationship blurs the lines. With the shift in the analysis back to the actual exercise of control, it is more important than ever to ensure third-party relationships do not lend themselves to a joint-employer finding. For strategy discussions regarding the above, employers should consult experienced labor counsel.


1 365 NLRB No. 165 (2017). The majority consisted of Chairman Miscimarra, Member Kaplan, and Member Emanuel with Member Pearce and Member McFerran dissenting.

2 Browning-Ferris Industries of California, d/b/a BFI Newby Island Recyclery (Browning-Ferris), 326 NLRB No. 186 (2015).

3 Airborne Express, 338 NLRB 597 (2002).

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.

Alan I. Model
Similar Articles
Relevancy Powered by MondaqAI
Troutman Sanders LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Troutman Sanders 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