The government just showed corporate America that they’re the boss, when they’d actually prefer not to be. In a landmark 3-2 decision issued last Thursday, the National Labor Relations Board expanded the definition of “joint employer” to include not just the boss that directly employs the worker but also the company that controls that workers’ labor conditions indirectly by contracting with the boss. The new definition could boost the nationwide low-wage workers’ movement known as the Fight for 15, by expanding the power of “outsourced” workers, who work for one company while formally employed through a third-party contractor, to organize and hold corporations accountable.
The case focused on the question of whether a recycling company, California-based Browning-Ferris Industries (BFI), should be considered a joint employer of 240 workers hired by a subcontractor, Leadpoint. The Board determined that BFI held significant enough control over Leadpoint workers’ employment and labor conditions to be considered a joint employer under the National Labor Relations Act.
The Teamsters had sought to organize a union election for Leadpoint workers—comprised of “part-time, and on-call sorters, screen cleaners, and housekeepers” on a short-term contract at a BFI recycling plant. The effort was thwarted by a regional labor-relations board office director and then appealed. The Teamsters argued that the narrow definition of joint employer allowed a company to act like a regular boss without upholding traditional employers’ responsibilities on fair pay and labor protections—which allows them to hold down labor costs and avoid “the basic legal obligation to recognize and bargain with the employees’ representative.”
In validating the Teamsters’ claims and allowing Leadpoint workers to move forward with unionization procedures, the NLRB overturned a precedent dating back to the early 1980s. The Board cited BFI’s power to determine key labor conditions for Leadpoint workers, including their daily duties, hiring, firing, training, and safety protections. In one instance described in the decision, a BFI operations manager claimed he did not directly exert control over firing decisions because he “merely requested” that certain employees be dismissed for misconduct but “did not order or direct” Leadpoint to execute the termination. (Of course, it didn’t matter to the worker which company issued the pink slip; he lost his job because BFI disapproved of his performance.)
The dissenting opinion rebutted that the redefinition of joint employer was arbitrary and “overbroad”: Would the household who commissioned a renovation job, for example, be as liable for the plumber’s labor conditions as the service provider that had dispatched him?
Likewise, International Franchise Association President Steve Caldeira assailed the board’s “tortured analysis” in a press release and demanded that federal lawmakers “intervene to halt these out-of-control, unelected Washington bureaucrats.”