At the invitation of the National Labor Relations Board (NLRB), the Retail Litigation Center (RLC) filed a brief today cautioning the agency against reversing more than 30 years of precedent to rewrite existing standards for determining joint-employer status under the National Labor Relations Act (NLRA). The RLC brief argues that the existing, direct-control standard is consistent and predictable and provides all stakeholders with clear expectations as opposed to the vague "industrial realities" standard advocated by the Unions.
The case in question, Browning-Ferris Industries of California, Inc. D/B/A BFI Newby Island Recyclery and FPR-IL, D/B/A Leadpoint Business Services v Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, asks whether businesses who utilize third-party contractors to perform duties outside the core of their business are required to bargain with the third-party's employees' union. The current standard allows businesses to contract at arms' length and does not require companies to negotiate with the third-party employees, whom they do not employ.
"There is no basis in law or sound policy to adopt a new joint-employer standard and retailers strongly oppose such action," said RLC President Deborah White. "The existing standard, which conforms with the law and is widely appreciated as straightforward and consistent, has proven to be workable, effective and fair over the course of 30 years of application. The NLRB must resist meddling in settled precedent and reject the Union proposal."
The RLC brief argues that shifting the focus of the joint-employer standard from direct control to the Union's indirect control or industrial realities test would inject uncertainty into contractual relationships and undermine retailers' ability to determine how to best run their businesses, while expanding the reach of the joint-employer standard far beyond Congress' intent.
From the brief:
"Abandoning this established and reasoned standard would bring about a new era of legal uncertainty, particularly in the retail industry, where companies regularly make the business judgment to contract out to third parties for services."
"Neither the logistics operators nor the vendors are the retailers' employees because the retailers do not meaningfully direct their work or their terms or conditions of employment. This distinction, which effectuates the purpose of the Act, provides retailers with a much higher degree of predictability than the Union's proposals."
The brief, drafted by McKenna Long & Aldridge LLP attorneys, Robin S. Conrad, Lawrence S. Ebner, Richard B. Hankins, Alston D. Correll III and Cary R. Burke., can be read here.
The Retail Litigation Center is a public policy organization that identifies and engages in legal proceedings which affect the retail industry. The RLC, whose members include some of the country's largest retailers, was formed to provide courts with retail industry perspectives on significant legal issues, and highlight the potential industry-wide consequences of legal principles that may be determined in pending cases.