The National Labor Relations Board (NLRB) on August 27 ruled that Browning Ferris Inc., a Houston-based waste management firm, is a joint employer of workers hired through a temporary staffing agency at its recycling center in Milpitas, California.
The ruling means that Browning Ferris must bargain collectively with staff at its Newby Island Resource Recovery Center who were hired by Leadpoint, an Arizona-based temporary staffing agency, to sort recyclable materials, maintain recycling equipment, and provide housekeeping services.
The board’s ruling expands the board’s previous definition of joint employer. The expanded definition could affect a pending NLRB case in which McDonald’s has been identified as a joint employer.
If the NLRB determines that McDonald’s and the owners of McDonald’s franchise are joint employers, McDonald’s could be held liable for unfair labor actions committed by its franchise owners.
In its Browning Ferris ruling, the NLRB noted that the number of temporary workers has expanded significantly over the last 35 years and that many of these contingent workers, hired through staffing agencies, are in fact permanent employees.
Using a temporary staffing agency to staff work sites allows companies to avoid responsibilities toward employees that the law requires.
In 2008, about 60 workers at Browning Ferris’ Newby Island recycling center, decided that they wanted to join Teamsters Local 350.
Although they worked at a Browning Ferris facility, they were paid and supervised by Leadpoint.
Leadpoint’s contract with Browning Ferris established restrictions that made meaningful bargaining between the union and Leadpoint difficult. For example, the contract put a cap on wages that Leadpoint could pay its employees.
The union sought to bargain directly with Browning Ferris, but the company refused.
The union filed charges with a regional NLRB office arguing that Browning Ferris was a joint employer because in addition to imposing wage restrictions, it maintained the right to approve new hires, could unilaterally fire workers, and exercised ultimate authority over the workers’ working conditions and schedules.
The NLRB’s regional office in California originally sided with Browning Ferris. The regional office determined that while Browning Ferris had the authority to determine wages and working conditions, the union hadn’t shown that the company had exercised this authority.
The regional office based its ruling on a 30-year old precedent that had narrowed the definition of what constitutes a joint employer.
The Teamsters appealed the regional office’s decision, and the NLRB in a 3-2 decision sided with union and determined that the precedent cited by the regional office undermined the intent of the National Labor Relations Act, which among other things, exists to encourage stable, meaningful collective bargaining.
The NLRB ruled that a joint employer relationship exists when companies “share or codetermine those matters governing the essential terms or conditions of employment” and that it didn’t matter whether the dominant party exercised direct control of the workforce.
“We are pleased with this decision, which will provide justice to workers who have been fighting for fairness in the workplace for a long time,” said Larry Daugherty, principal officer of Teamsters Local 350. “We are honored to support these courageous workers who took a stand to form a union—they’ve hung in there the entire time that this process has played out. We are confident that with this decision the workers will able to engage in real collective bargaining.”
In a media release on the NLRB’s decision, the Teamsters said that the NLRB’s j decision will affect a large number of industries that use temporary staffing agencies, including the hospitality, retail, manufacturing, construction, financial service, cleaning services, and security services industries.
The ruling could also affect the fast food industry, where large corporations like McDonald’s sell franchises to operate their local dining facilities.
In 2012, thousands of fast food workers participated in strikes for better wages.
Hundreds of these strikers were either fired or faced intimidation by their employers when they returned to work.
As a result, 310 unfair labor charges were filed with the NLRB on behalf of aggrieved McDonald’s employees.
McDonald’s argues that it is not responsible for the actions of its franchise owners because they are independent businesses.
But the NLRB’s general counsel has found that McDonald’s is a joint employer because it exerts substantial control over the employees of franchise owners.
The NLRB is now in the process of determining whether its general counsel is correct and has consolidated the many charges.
Hearings have and will be held in New York, Chicago, and Los Angeles.
When the hearings are complete and all sides have had a chance to provide evidence, the NLRB will make its final ruling.
If the NLRB rules that McDonald’s is a joint employer, then the company could be held liable for the unfair labor practices charges, which include discriminatory discipline, reduction in hours, and discharges against employees who participated in the strikes.
Being liable for these charges may give McDonald’s an incentive to bargain collectively with a union representing these workers to resolve these charges.