Browning-Ferris Indus. of Cal., Inc. v. Nat'l Labor Relations Bd.
911 F.3d 1195
D.C. Cir.2018Background
- Browning-Ferris (BFI) operates a large recycling facility and contracted Leadpoint to supply ~240 sorters, screen cleaners, and housekeepers; Leadpoint recruited, paid, supervised, disciplined, and terminated those workers under a written staffing agreement.
- The Union petitioned the NLRB to represent a bargaining unit including Leadpoint workers and alleging BFI and Leadpoint were joint employers.
- The NLRB (majority) adopted an updated joint-employer test: first ask whether a common-law employment relationship exists, then whether the putative joint employer has sufficient control over essential employment terms to permit meaningful bargaining; the Board said reserved (unexercised) and indirect control are probative.
- The Board applied that test and found BFI and Leadpoint to be joint employers.
- The D.C. Circuit reviewed de novo whether the Board’s articulation of the test comports with traditional common-law agency principles, granting partial relief and remanding limited aspects to the Board for clarification and further proceedings.
Issues
| Issue | Plaintiff's Argument (Browning‑Ferris) | Defendant's Argument (NLRB/Union) | Held |
|---|---|---|---|
| Whether the common‑law “right to control” may be based on a reserved but unexercised authority | Reserved/unexercised rights alone should not create joint‑employer status; focus should be on actual exercised supervision | The common‑law right to control includes reserved rights; such rights are probative of employer status | The court: reserved (authorized) rights to control are part of the common law and may be considered |
| Whether indirect control (control through intermediaries or influence) may be relevant | Indirect control should be excluded or given little weight; joint employer status should require direct and immediate control | Indirect control can be probative; agencies/entities using intermediaries cannot avoid liability by contracting away control | The court: indirect control can be relevant under the common law, but must be limited to indirect control that affects essential terms and conditions of employment |
| Proper standard of deference to Board’s articulation of the common law | Board’s formulation should receive deference | Board contends its reasonable judgment merits deference | The court: interpretation of common‑law agency is a pure legal question reviewed de novo; no Chevron deference to Board on common‑law meaning |
| Whether Board adequately applied its two‑step test here and whether its application can be applied retroactively | Retroactive application and Board’s factual application exceed common‑law bounds; Board failed to confine ‘‘indirect’’ control to essential terms | Board viewed its articulation as consistent with common law and applied it to facts to support bargaining obligations | The court: affirmed that both reserved and indirect control are relevant but reversed/remanded because the Board failed to limit indirect‑control consideration to matters bearing on essential terms and conditions and did not meaningfully apply the second step; remand for clarification; retroactivity decision deferred pending that clarification |
Key Cases Cited
- Boire v. Greyhound Corp., 376 U.S. 473 (1964) (joint‑employer inquiry turns on whether putative entity possesses sufficient control over employees’ work)
- NLRB v. Browning‑Ferris Indus. of Pennsylvania, Inc., 691 F.2d 1117 (3d Cir. 1982) (adopted test that joint employers "share or co‑determine" essential terms and conditions)
- Dunkin’ Donuts Mid‑Atlantic Distrib. Ctr., Inc. v. NLRB, 363 F.3d 437 (D.C. Cir. 2004) (reiterated that joint employers must share or co‑determine essential terms and conditions)
- NLRB v. United Ins. Co. of Am., 390 U.S. 254 (1968) (Taft‑Hartley requires application of general common‑law agency principles to employee/independent‑contractor distinctions)
- Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91 (2011) (when statute uses terms with settled common‑law meanings, courts presume incorporation of those meanings)