NLRB Vacates Hy-Brand Decision Returning to BFI Joint-Employer Standard . . . For Now

In December 2017, the National Labor Relations Board (NLRB) issued a number of important decisions prior to the end of then chairman Philip Miscimarra’s term. One of those important decisions was Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017). Hy-Brand  overturned the Board’s controversial decision in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015), which imposed new standards for joint-employer determinations. Browning-Ferris was the law of the land for just two years before being overturned by Hy-Brand, and now Hy-Brand has been vacated just two months after it was issued.

Hy-Brand Vacated Due to Ethical Concerns

By order dated February 26, 2018, the NLRB vacated its December 14, 2017, Hy-Brand decision due to questions and concerns regarding the participation of Member William Emanuel in the decision. As a result of the NLRB’s order, Browning-Ferris is once again extant Board law. The decision to vacate Hy-Brand was based in part on a report from the NLRB’s inspector general determining that because Member Emanuel would have been ethically prohibited from participating in the Browning-Ferris case due to the involvement of his former law firm in that underlying case, he was similarly prohibited from participating in Hy-Brand because it involved the same legal arguments advanced and argued in Browning-Ferris. Importantly, the firm at which Member Emanuel was a shareholder before joining the Board did not represent Browning-Ferris in the underlying case, but rather, another entity involved in the case.

Browning-Ferris Now Heads Back to DC Circuit and Remains Law for Now

The pending challenge to the Browning-Ferris decision will now proceed back to the U.S. Court of Appeals for the District of Columbia Circuit. Meanwhile, the NLRB will await the confirmation of John Ring to bring the Board back to a full complement of five members so it can reevaluate Hy-Brand and thus the holding of Browning-Ferris. Given how the current members have ruled in Browning-Ferris and Hy-Brand, however, and given Member Emanuel’s prohibition from participating, it is unlikely the Board will be able to overturn Browning-Ferris as it will be deadlocked with two members on each side of the issue.

Retained Right to Control Once Again Sufficient to Create Joint Employer

For now, and pending a decision from the D.C Circuit, employers are once again bound by the Board’s Browning-Ferris decision. In short, Browning-Ferris stands for the proposition that if an employer retains the right to control another employer’s employees—regardless of whether it actually exercises that control—such control is sufficient to establish a joint-employer relationship over those employees it has retained the right to control. The opinion of the inspector general to apply what amounts to a complete issue preclusion on a Board member is unprecedented and rests upon questionable legal analysis. Indeed, such “issue preclusion” may very well have far reaching implications on the ability of the NLRB to fulfill its statutory function. In nearly all cases, Board members are selected from among lawyers representing both labor and management. During their careers, these attorneys and their law firms represent clients and have made arguments regarding all manner of labor relations issues. In short, the inspector general’s opinion disqualifies large numbers of potential candidates from government service and prevents the NLRB from reaching decisions on important national labor policy.