The government just redefined what it means to be an employe

[ttt]

Very interesting. 


www.vox.com/2014/12/19/7420729/nlrb-browning-ferris-employer


On Thursday, the National Labor Relations Board issued what observers are already calling its most significant ruling in 35 years. It ruled that the company Browning-Ferris Industries of California is a "joint employer" of workers it hired through a temp agency. The company had contended that the fact that the workers were directly employed by the temp agency, a contractor, meant that it could not be considered their employer for the purpose of unionization. NLRB rejected that reasoning.

Browning-Ferris is not super important as a company. But the NLRB's reasoning opens the door for labor organizing in industries that had previously been resistant. Big franchisers like McDonald's could be targeted. So could big non-unionized government contractors like Booz Allen Hamilton. It's too early to say what the ruling's precise implications will be, but if the ruling holds, they could be massive.

The Browning-Ferris decision redefines who technically "employs" many US workers

First, some background: waste management firm Browning-Ferris used Leadpoint, a staffing agency, as a subcontractor at a California recycling plant. The Teamsters union organizing the workers argued that Browning-Ferris and Leadpoint were joint employers. Browning-Ferris disagreed, saying they were not the direct employer. The regional NLRB director sided with Browning-Ferris, ruling that its involvement in the lives of these workers was only "routine in nature" and that therefore it was not a joint employer. The national board overruled that judgment.

THE BROWNING DECISION COULD BE "CATACLYSMIC," ACCORDING TO ONE ATTORNEY

The key question in the case was what makes an employer an employer. The current standard is that a secondary company can be judged a "joint employer" if it has "direct and immediate impact" on the worker's terms and conditions — say, if that second company is involved in hiring and determining pay levels.

In an amicus brief, Meghan Phillips, the counsel for the NLRB general counsel (which is something like a prosecutor's office, and operates separately from the board itself) argued that this should be changed to a much broader definition: "if one of the entities wields sufficient influence over the working conditions of the other entity's employees such that meaningful bargaining could not occur in its absence," then the two entities are joint employers, she says. If you need to be at the table in a labor negotiation, then you're an employer.

While Browning did not directly hire, fire, or set pay levels for the Leadpoint employees, it did determine the facility's hours and when overtime would happen, and it also "closely monitor[ed]" the work that was done in the plant, the AFL-CIO argues in its amicus brief.

"What the union says in Browning-Ferris is, 'Look, we want everybody who controls our terms and conditions of employment at the table,'" says Craig Becker, general counsel at the AFL-CIO and a former NLRB board member.

That standard could mean that many contracting companies and franchisers find themselves designated as joint employers of their contractors' and franchisees' employees.
 

That could change how corporations interact with workers

"The general counsel is trying to say that even if, as employer one, I don't directly tell employees what to do, but in effect I am, through employer two, controlling employees, that makes me joint employer," Barbara Fick, associate professor at Notre Dame Law School and a former NLRB field attorney, told us in December.

Now that the NLRB has agreed with that reasoning, big corporations might start to interact with their subcontractors' or franchisees' workers differently, either fully stepping in and becoming more of a hands-on employer or backing off and trying not to fall under the definition of "joint employer."

LABOR GROUPS ARGUE THAT THESE SORTS OF WORKING RELATIONSHIPS LEAD TO WORSE CONDITIONS AND PAY

Businesses, of course, are worried about the repercussions of a decision. In a 2014 letter to the NLRB, the International Franchise Association writes that franchises provide "jobs, opportunities, and extraordinarily positive economic results" for the US, and that a decision that extends to franchises would threaten that.

But labor (and the NLRB general counsel) argues that businesses have increasingly used contractors, temp workers, and franchises as means to escape unionization. As Philips writes in the NLRB general counsel's brief:

Some scholars have posited that franchisors consider avoidance of unionization and the collective-bargaining process to be the "prime advantage of franchising," and "in some cases, the driving force behind the conversion of fully integrated, employee-operated businesses to franchised operations is an attempt to prevent or remove the supposedly harmful effects of unionization and thereby increase profits."

The buffer that these sorts of relationships put between larger companies and workers, labor groups also argue, enable worse working conditions, less transparency, and lower pay.

All of this could eventually trickle down to consumers. As Fisk told the New York Times last year, "if labor costs for franchisees go up, then the price of a Big Mac will go up." And it's not just labor prices that might go up — if businesses are now legally liable for what goes on at their franchises, that means insurance will cost more, which could also bump up prices for consumers.
 

The ruling could impact a huge segment of the economy

It's hard to know exactly how many workers could be affected by this decision. But it could be "cataclysmic," according to Michael Lotito, cochair of the Workplace Policy Institute at Littler Mendelson.

"It has a way of upsetting these business relationships and employers thinking they were separate suddenly finding they are combined," says Lotito. "That has just enormous implications for business relationships."

For example, the NLRB general counsel notes that fast-food chains often provide their franchisees with high-tech scheduling software (sometimes called "just-in-time" software) that uses data and algorithms to determine when workers need to come in and for how long. Though restaurants aren't directly telling workers when to work by using that software, the argument goes that it is indirectly directing scheduling by giving franchisees the software, making it a joint employer of those franchises' employees.

Browning could also affect supply-chain relationships, Lotito says, as some companies create contracts with their suppliers that are restrictive enough that they wind up indirectly dictating the terms of employment at the suppliers' workplaces.

Fick uses Walmart as a hypothetical example: "They're so big they can pretty much control how the people they deal with make their stuff. They wield a lot of influence on the people who are actually doing the business," she says. Walmart's terms in its contracts with its suppliers, she says, can heavily influence pay and benefit levels.

"If Walmart is saying, 'We want 20 gazillion shirts, and we're going to pay you X dollars for it,' well what's the effect of that?"

At the very least, the numbers available suggest that the number of people potentially affected by this decision is growing. The number of franchise employees in the US is growing at 2.3 percent per year, and is currently at around 8.5 million, according to the International Franchise Association. Not only that, but as of November, the number of employees in the temporary help industry was growing at an annual rate of 8.5 percent.

The NLRB has leaned toward labor recently

The Browning ruling is the latest in a spate of recent NLRB decisions that have fallen in favor of labor. In 2014, the board made the union election process much speedier (opponents call the new standards the "ambush election" rules) and in a separate case said that employees can organize on workplace email systems. In January 2013, the board ruled that speech on social media is protected speech — in other words, your employer can't ban you from complaining about your working conditions on Twitter.

These actions have angered the business community, causing some to see the Obama-era NLRB as activist.

However, Fick sees a different kind of coherence to these decisions. It's not so much that they're pro-labor as that they're adapting old labor rules to a new world — one in which employees have public conversations about their jobs on Twitter, and also one in which huge corporations increasingly rely on subcontracted or franchise workers. "As industrial relations change, we have to figure out how to apply the old rules to the new situation," she says.

The NLRB doesn't have the final word

The board's ruling won't necessarily hold. The case could still be challenged in appeals court, and the pro-business DC Circuit Court of Appeals especially has displayed a willingness to overturn NLRB judgments.[/i]

[iammalcolmx]

I don't like this and hope it's overturned.

[ttt]

Aug 28, 2015 7:50:27 GMT -5 iammalcolmx said:

I don't like this and hope it's overturned.

Tell me more about this! This is not an area I know a lot about and I was hoping our board experts could provide some more context. 

[iammalcolmx]

Aug 28, 2015 7:53:03 GMT -5 ttt said:

Aug 28, 2015 7:50:27 GMT -5 iammalcolmx said:

I don't like this and hope it's overturned.

Tell me more about this! This is not an area I know a lot about and I was hoping our board experts could provide some more context. 

I don't understand how someone is your employee when you don't, hire, fire, or set their working conditions. Why would said company now have to be liable for labor violations AND have to negotiate with you at a bargaining table when they are so far removed from the company. The people are employed by their Temp agencies or Franchisees not these other companies.

[bowies]

So if I work for a government contractor does that mean I can be considered part of the government? I don't know if that's good or bad. I'm going with bad.

[Cicero]

Aug 28, 2015 8:43:46 GMT -5 bowies said:

So if I work for a government contractor does that mean I can be considered part of the government? I don't know if that's good or bad. I'm going with bad.

No. The NLRA (which created the NLRB) does not apply to the governement or government employees.

[arterr0]

Aug 28, 2015 8:08:23 GMT -5 iammalcolmx said:

Aug 28, 2015 7:53:03 GMT -5 ttt said:

Tell me more about this! This is not an area I know a lot about and I was hoping our board experts could provide some more context. 

I don't understand how someone is your employee when you don't, hire, fire, or set their working conditions. Why would said company now have to be liable for labor violations AND have to negotiate with you at a bargaining table when they are so far removed from the company. The people are employed by their Temp agencies or Franchisees not these other companies.

I can see this side to a point, particularly for franchisees, but I also see it from a different perspective with regard to temp services. I work for a workers comp carrier who expressly refuses to provide coverage for temp service companies due to the lack of control they have (or choose to exercise) over their employees. Many companies in the manufacturing and construction industries choose to transfer some of their risk by using temps on either a temp-to-hire basis or for overflow work. These temps are very rarely directly supervised or directed by the temp agency. Instead, their work conditions are controlled by the mfg/constr. company. Some of the better temp agencies may have a "supervisor" onsite, but this is more the exception than the rule. Sure, the temp can raise any concerns about work conditions with their temp agency, but this is likely to result in their assignment being terminated.

[iammalcolmx]

Aug 28, 2015 9:04:29 GMT -5 arterr0 said:

Aug 28, 2015 8:08:23 GMT -5 iammalcolmx said:

I don't understand how someone is your employee when you don't, hire, fire, or set their working conditions. Why would said company now have to be liable for labor violations AND have to negotiate with you at a bargaining table when they are so far removed from the company. The people are employed by their Temp agencies or Franchisees not these other companies.

I can see this side to a point, particularly for franchisees, but I also see it from a different perspective with regard to temp services. I work for a workers comp carrier who expressly refuses to provide coverage for temp service companies due to the lack of control they have (or choose to exercise) over their employees. Many companies in the manufacturing and construction industries choose to transfer some of their risk by using temps on either a temp-to-hire basis or for overflow work. These temps are very rarely directly supervised or directed by the temp agency. Instead, their work conditions are controlled by the mfg/constr. company. Some of the better temp agencies may have a "supervisor" onsite, but this is more the exception than the rule. Sure, the temp can raise any concerns about work conditions with their temp agency, but this is likely to result in their assignment being terminated.

Our Temp Service company has WC, however if one of them gets into an accident here it goes into our OSHA Log. Additionally yes our supervisors direct our temps but we are not responsible for hiring, firing, setting their wages, or paying them. If they want to Unionize that's between the Temp workers and their employer, we shouldn't have to show up at the bargaining table.

ETA: I do feel a bit different if your entire workforce is made up or contractors, but they need to address that in different ways.

[Cicero]

Aug 28, 2015 9:31:12 GMT -5 iammalcolmx said:

Aug 28, 2015 9:04:29 GMT -5 arterr0 said:

I can see this side to a point, particularly for franchisees, but I also see it from a different perspective with regard to temp services. I work for a workers comp carrier who expressly refuses to provide coverage for temp service companies due to the lack of control they have (or choose to exercise) over their employees. Many companies in the manufacturing and construction industries choose to transfer some of their risk by using temps on either a temp-to-hire basis or for overflow work. These temps are very rarely directly supervised or directed by the temp agency. Instead, their work conditions are controlled by the mfg/constr. company. Some of the better temp agencies may have a "supervisor" onsite, but this is more the exception than the rule. Sure, the temp can raise any concerns about work conditions with their temp agency, but this is likely to result in their assignment being terminated.

Our Temp Service company has WC, however if one of them gets into an accident here it goes into our OSHA Log. Additionally yes our supervisors direct our temps but we are not responsible for hiring, firing, setting their wages, or paying them. If they want to Unionize that's between the Temp workers and their employer, we shouldn't have to show up at the bargaining table.

ETA: I do feel a bit different if your entire workforce is made up or contractors, but they need to address that in different ways.

i am wondering how this is supposed to work logistically. If a temp agency's employees vote to unionize as a whole and you sun-contract three people from them are you now required to come to the table along with everyone else who uses this temp agency?

Or are they just saying that temps can vote in an attempt to unionize your workplace?

Unfortunately I'm kind of slammed today but will definitely have to read this tonight.

[mominatrix]

I think this is fascinating.

IME many many employers contact out work, then direct that work and control the working conditions of the contractors in every way that matters. In these cases, it makes a ton of sense for them to be considered employees.

... But my guess is that this decision won't stand, more because of anti union sentiment than anything else

[tacosforlife]

Aug 28, 2015 9:31:12 GMT -5 iammalcolmx said:

Aug 28, 2015 9:04:29 GMT -5 arterr0 said:

I can see this side to a point, particularly for franchisees, but I also see it from a different perspective with regard to temp services. I work for a workers comp carrier who expressly refuses to provide coverage for temp service companies due to the lack of control they have (or choose to exercise) over their employees. Many companies in the manufacturing and construction industries choose to transfer some of their risk by using temps on either a temp-to-hire basis or for overflow work. These temps are very rarely directly supervised or directed by the temp agency. Instead, their work conditions are controlled by the mfg/constr. company. Some of the better temp agencies may have a "supervisor" onsite, but this is more the exception than the rule. Sure, the temp can raise any concerns about work conditions with their temp agency, but this is likely to result in their assignment being terminated.

Our Temp Service company has WC, however if one of them gets into an accident here it goes into our OSHA Log. Additionally yes our supervisors direct our temps but we are not responsible for hiring, firing, setting their wages, or paying them. If they want to Unionize that's between the Temp workers and their employer, we shouldn't have to show up at the bargaining table.

ETA: I do feel a bit different if your entire workforce is made up or contractors, but they need to address that in different ways.

So I have a question about this. I get not wanting to show up to the bargaining table re: wages.

But your company is the one that implements the safety protocols, right? The temp agency doesn't have any control over that, does it? I suppose it should go into some sort of OSHA log for the temp agency so it can be seen if they're only sending people to places with high accident rates or something, but I would think that should also go on your company's record. Thoughts?

I also have a question on hiring/firing. I get that you're not directly responsible, but could your company tell the temp agency not to send you back employees A, B, and C because they aren't good? I don't know how this stuff works.

[iammalcolmx]

Aug 28, 2015 10:44:21 GMT -5 tacosforlife said:

Aug 28, 2015 9:31:12 GMT -5 iammalcolmx said:

Our Temp Service company has WC, however if one of them gets into an accident here it goes into our OSHA Log. Additionally yes our supervisors direct our temps but we are not responsible for hiring, firing, setting their wages, or paying them. If they want to Unionize that's between the Temp workers and their employer, we shouldn't have to show up at the bargaining table.

ETA: I do feel a bit different if your entire workforce is made up or contractors, but they need to address that in different ways.

So I have a question about this. I get not wanting to show up to the bargaining table re: wages.

But your company is the one that implements the safety protocols, right? The temp agency doesn't have any control over that, does it? I suppose it should go into some sort of OSHA log for the temp agency so it can be seen if they're only sending people to places with high accident rates or something, but I would think that should also go on your company's record. Thoughts?

I also have a question on hiring/firing. I get that you're not directly responsible, but could your company tell the temp agency not to send you back employees A, B, and C because they aren't good? I don't know how this stuff works.

Yes they are our safety protocols. We only have to communicate any incidents with them, yes incidents go in our records. However, since they are the ones responsible for WC I would think it would count against them( somewhere)  as well.

Yes we have told them to not send people back, but just because they aren't good at our facility doesn't mean they won't be good in another capacity.  I am not under the impression that will get them fired, but their skills are most likely reassessed.

[LadySusan]

Aug 28, 2015 9:04:29 GMT -5 arterr0 said:

Aug 28, 2015 8:08:23 GMT -5 iammalcolmx said:

I don't understand how someone is your employee when you don't, hire, fire, or set their working conditions. Why would said company now have to be liable for labor violations AND have to negotiate with you at a bargaining table when they are so far removed from the company. The people are employed by their Temp agencies or Franchisees not these other companies.

I can see this side to a point, particularly for franchisees, but I also see it from a different perspective with regard to temp services. I work for a workers comp carrier who expressly refuses to provide coverage for temp service companies due to the lack of control they have (or choose to exercise) over their employees. Many companies in the manufacturing and construction industries choose to transfer some of their risk by using temps on either a temp-to-hire basis or for overflow work. These temps are very rarely directly supervised or directed by the temp agency. Instead, their work conditions are controlled by the mfg/constr. company. Some of the better temp agencies may have a "supervisor" onsite, but this is more the exception than the rule. Sure, the temp can raise any concerns about work conditions with their temp agency, but this is likely to result in their assignment being terminated.

This was my observation as a scientist at a pharmaceutical company.  The new hires in the lab were all contractors and the old hires were regular employees.  They worked side-by-side in the lab under the same hiring manager.  They were responsible for a different assay than regular employees.  I think that decision was mainly legal and not technical.

I think the decision to hire contractors saved the company quite a bit of money because the temp agency had very poor benefits.  And this of course led to a higher turnover rate as the contractors were able to find better positions.

[tres3]

This is a huge win for workers.

[iammalcolmx]

Aug 28, 2015 11:33:49 GMT -5 tres3 said:

This is a huge win for workers.

Hardly so. It can be appealed. 

[tres3]

Aug 28, 2015 11:36:45 GMT -5 iammalcolmx said:

Aug 28, 2015 11:33:49 GMT -5 tres3 said:

This is a huge win for workers.

Hardly so. It can be appealed. 

It can be appealed but the fact that the NLRB sided with workers is a big shift and should be celebrated

[iammalcolmx]

Aug 28, 2015 11:40:53 GMT -5 tres3 said:

Aug 28, 2015 11:36:45 GMT -5 iammalcolmx said:

Hardly so. It can be appealed. 

It can be appealed but the fact that the NLRB sided with workers is a big shift and should be celebrated

They are siding with Unions

[tres3]

Aug 28, 2015 11:42:03 GMT -5 iammalcolmx said:

Aug 28, 2015 11:40:53 GMT -5 tres3 said:

It can be appealed but the fact that the NLRB sided with workers is a big shift and should be celebrated

They are siding with Unions

I consider Unions pro worker

[gault]

When I worked in manufacturing, we had temp employees who stayed on for 3 or more years, because they were working on a certain project (we were DoD-contracted). It makes the line between temp and employee very blurry.

If I recall correctly, temp agencies are responsible for most benefits offered, if any. Does the employer pay work comp, or the agency? (I know someone mentioned this above, but didn't know if it was an exception to the rule)

[iammalcolmx]

Aug 28, 2015 12:22:29 GMT -5 gault said:

When I worked in manufacturing, we had temp employees who stayed on for 3 or more years, because they were working on a certain project (we were DoD-contracted). It makes the line between temp and employee very blurry.

If I recall correctly, temp agencies are responsible for most benefits offered, if any. Does the employer pay work comp, or the agency? (I know someone mentioned this above, but didn't know if it was an exception to the rule)

[arterr0]

Aug 28, 2015 12:22:29 GMT -5 gault said:

When I worked in manufacturing, we had temp employees who stayed on for 3 or more years, because they were working on a certain project (we were DoD-contracted). It makes the line between temp and employee very blurry.

If I recall correctly, temp agencies are responsible for most benefits offered, if any. Does the employer pay work comp, or the agency? (I know someone mentioned this above, but didn't know if it was an exception to the rule)

The agency is responsible for providing work comp. Transferring this risk is one of the main advantages of using a temp service. For many companies, work comp is their second largest expense (after payroll). The lack of control that the temp service has over its own employees and their safety is why many comp carriers are hesitant to provide policies for such agencies.

[ttt]

So when you work for a temp agency, the agency cuts your paycheck, provides benefits, files your tax forms, and pays your workers comp premiums. Meanwhile, the employer provides the work facility, controls the work environment, sets the hours, and manages your day to day work. Is that a correct assessment of most temp arrangements?

[arterr0]

Aug 28, 2015 12:45:12 GMT -5 ttt said:

So when you work for a temp agency, the agency cuts your paycheck, provides benefits, files your tax forms, and pays your workers comp premiums. Meanwhile, the employer provides the work facility, controls the work environment, sets the hours, and manages your day to day work. Is that a correct assessment of most temp arrangements?

In a nutshell, yes.

[ttt]

Aug 28, 2015 12:46:06 GMT -5 arterr0 said:

Aug 28, 2015 12:45:12 GMT -5 ttt said:

So when you work for a temp agency, the agency cuts your paycheck, provides benefits, files your tax forms, and pays your workers comp premiums. Meanwhile, the employer provides the work facility, controls the work environment, sets the hours, and manages your day to day work. Is that a correct assessment of most temp arrangements?

In a nutshell, yes.

Thanks!

One more question - who typically decides how much the worker gets paid? 

I worked for one of the big temp agencies in college and then my first job out of college was temp-to-perm. It was a pretty good experience for me, but I don't have much knowledge in this beyond that. 

[arterr0]

Aug 28, 2015 12:49:43 GMT -5 ttt said:

Aug 28, 2015 12:46:06 GMT -5 arterr0 said:

In a nutshell, yes.

Thanks!

One more question - who typically decides how much the worker gets paid? 

I worked for one of the big temp agencies in college and then my first job out of college was temp-to-perm. It was a pretty good experience for me, but I don't have much knowledge in this beyond that. 

The temp agency sets the rate of pay. The temp agency negotiates with the company to determine the rate that the company will pay the agency to provide employees. This rate that the company pays includes all benefits, including wage, as well as profit for the agency.

[redheadbaker]

Aug 28, 2015 12:45:12 GMT -5 ttt said:

So when you work for a temp agency, the agency cuts your paycheck, provides benefits, files your tax forms, and pays your workers comp premiums. Meanwhile, the employer provides the work facility, controls the work environment, sets the hours, and manages your day to day work. Is that a correct assessment of most temp arrangements?

That's how my current arrangement works.

[redheadbaker]

Aug 28, 2015 12:49:43 GMT -5 ttt said:

Aug 28, 2015 12:46:06 GMT -5 arterr0 said:

In a nutshell, yes.

Thanks!

One more question - who typically decides how much the worker gets paid? 

I worked for one of the big temp agencies in college and then my first job out of college was temp-to-perm. It was a pretty good experience for me, but I don't have much knowledge in this beyond that. 

IME, it's a negotiation between the employer and the agency. When they contact me, I'm quoted a range, and I can accept or pass.

[ttt]

Thanks everyone!

I can see both sides of this - if both the agency and the employer are responsible for major aspects of the work, I can certainly see the argument that they should be considered co-employers. But then, I can also see how it could make things extremely difficult logistically, if they're treated as equal employers.

[iammalcolmx]

Aug 28, 2015 13:05:57 GMT -5 ttt said:

Thanks everyone!

I can see both sides of this - if both the agency and the employer are responsible for major aspects of the work, I can certainly see the argument that they should be considered co-employers. But then, I can also see how it could make things extremely difficult logistically, if they're treated as equal employers.

Remember the case of the Franchisee's which all the headlines seems to really focus on. In this case the employees have virtually no contact with the corporate office.  

[ttt]

Aug 28, 2015 13:08:36 GMT -5 iammalcolmx said:

Aug 28, 2015 13:05:57 GMT -5 ttt said:

Thanks everyone!

I can see both sides of this - if both the agency and the employer are responsible for major aspects of the work, I can certainly see the argument that they should be considered co-employers. But then, I can also see how it could make things extremely difficult logistically, if they're treated as equal employers.

Remember the case of the Franchisee's which all the headlines seems to really focus on. In this case the employees have virtually no contact with the corporate office.  

And then that seems completely different, because then how many of those things I listed above (working conditions, work facility, hours, etc.) is corporate actually responsible for? Not very many, right?