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The EEOC Appears to Embrace the NLRB's Expanding "Joint Employer" Definition

When talking to companies about compliance with federal and state employment laws, employment lawyers sometimes hear “Oh, those are contractors; we don’t need to worry about them” or “those are the staffing agency’s employees, they are not our employees.” Whether it’s identifying potential liabilities in a transaction, determining what records a company needs to keep about its workforce, dealing with union activity, or anything in between, employment lawyers have learned that contractors and staffing agency employees should not be summarily ignored. Government agencies that enforce employment laws have increasingly held companies responsible for employment-related obligations with respect to people who are not considered employees by most companies.

Back in August of 2015, the National Labor Relations Board (NLRB) decided the Browning-Ferris Industries case,1 which expanded the NLRB’s test for whether a company is a “joint employer.” This doctrine is used to find companies to be covered under various employment laws as an “employer” despite not formally being the employing entity of an individual. In Browning-Ferris, the NLRB found that the joint employer test includes not only direct and actual control over the employment relationship, but also the ability to exercise that control, even if it is never exercised. After that decision, many companies began looking at the various relationships they had with business partners, including franchisees, contractors, staffing agencies, and the like, and worrying—justifiably so—that this expansive and vague standard might bleed over into other employment laws. The Browning-Ferris case is still working its way through the courts, but just last week, the EEOC added its voice to the fray, arguing in an amicus brief before the Ninth Circuit in Browning Ferris’s challenge to the NLRB decision that the NLRB’s standard was correct and consistent with the test under federal discrimination laws.

While not surprising, the EEOC’s explicit endorsement of the NLRB’s decision is worth paying attention to. After all, as the EEOC noted in its brief, the definitions of “employer” under the National Labor Relations Act and Title VII, as well as other discrimination laws, are stated in similar terms. As courts often point out, the remedial purposes of the statutes cut in favor of interpreting their coverage provisions broadly. Further, courts often defer to these agencies’ interpretations in deciding cases under the statutes they administer.

All these development reflect just another reason why employers should take a close look at their business relationships and non-employee workforces, especially when those relationships have stayed the same for years without re-evaluation under the shifting legal landscape.

Browning-Ferris Indus. of California, Inc., 362 N.L.R.B. No. 186 (2015).
2 Brief of the United States Equal Employment Opportunity Commission as Amicus Curiae in Support of Respondent/Cross-Petitioner and in Favor of Enforcement, Browning-Ferris Indus. of Cal., Inc. v. NLRB, No. 16-1028 (9th Cir. filed Sept. 14, 2016).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.