United States: NLRB Blows Up Staffing Agency Model: Rewrites Joint-Employer Test

Last Updated: September 16 2015
Article by Todd Lebowitz


In a 3-2 decision, the National Labor Relations Board spontaneously redefined joint employment in a way that threatens to turn almost every company that works with a staffing agency into a joint employer for collective bargaining purposes.

Throwing a gigantic bone to unions, the NLRB overturned 30 years of its own precedent to create an "unprecedented" and "ambiguous" new world order that, according to the two-member dissent, "promises to effect a sea change in labor relations and business relationships."

In Browning-Ferris Industries of California, the Board considered a scenario in which Browning-Ferris retained a staffing firm, Leadpoint, to supply labor at a recycling facility. The staffing firm did all hiring, firing, supervising, scheduling, disciplining, evaluating, assigning, and training of its personnel.

Browning-Ferris, on the other hand, did little more than run its core business, controlling the speed at which product ran on its assembly lines and requiring that any worker hired by the staffing agency follow Browning-Ferris's safety rules. Browning-Ferris also required the staffing agency's workers to be drug-free. (Tyrants!)

Before issuing its decision, the Board expressed concern over the rapid growth of the contingent workforce model in the modern economy. The Board decried the expanded use of nonemployee labor from staffing agencies. Union membership is not nearly as high as it used to be. (Early drafts of the decision also bemoaned the untimely demise of the telegraph and the "Dick Van Dyke Show.") The three-member Democratic majority wrote (presumably in ink, with a freshly plucked quill) that because of this newfangled way of doing business, the joint-employer standard that the Board had followed for the past 30 years "does not best serve the Act's policies" anymore. "This development is reason enough," wrote the majority (its black-and-white Zenith humming softly in the background) "to revisit the Board's current joint-employer standard."

The Board ruled that companies and their staffing agencies may be deemed joint employers even when the staffing agency controls almost all the roles typically handled by an employer – hiring, firing, disciplining, scheduling, etc. The Board ruled that the limited control Browning-Ferris exerted over the staffing agency's employees was enough to make it a joint employer, because Browning-Ferris could have exercised more control if it wanted to, even though it never did and never had.

The Board claimed it was applying a common law right-to-control test to reach its decision, which on its face sounds reasonable. Common law right-to-control tests are commonly used to determine whether someone is an employee or an independent contractor. But over the past 30 years, the Board had consistently evaluated joint employment based on a real-world assessment of how the two entities actually oversaw the work force. Where a staffing agency controlled all routine aspects of employment, no joint employment would be found.

This decision blows everything up. The Board took the most minute and insignificant aspects of control exerted by Browning-Ferris and elevated their importance to a point where nearly every company that retains staffing-agency workers is now at risk of being deemed a joint employer. In the NLRA context, a finding of joint employment means that both companies – despite being completely separate and independent – would have to sit at the bargaining table with the putative union to collectively bargain over terms and conditions of employment.

"This change," the exasperated dissenting members explained, "will subject countless entities to unprecedented new joint-bargaining obligations that most do not even know they have [and] to potential joint liability for unfair labor practices and breaches of collective-bargaining agreements."

With charts, diagrams, and bullet-pointed outlines, the dissent explained in detail how this new scheme is unworkable in the real world. Who sits at the bargaining table? What is the bargaining unit? What if the company and staffing agency disagree? Which employer participates in NLRB proceedings? What happens when the staffing agency gets new clients? What if those new clients have other staffing agencies or other pre-existing bargaining obligations? The list of questions and problems consumes page after page in the dissent.

The dissent concluded by warning of the "potentially massive economic implications" of this decision. The long-term consequences remain to be seen. For now, those companies that engage staffing agencies, as well as staffing agencies themselves, need to prepare themselves for a greatly increased risk that they may be deemed joint employers that are required to collectively bargain – collectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions