Who Do You Work For? Redefining the Employment Relationship

Employment law does not adhere to the biblical injunction that “No servant can serve two masters …” Under many regulatory schemes the law recognizes that two (or more) employers may owe legal duties to a single employee. Many businesses have decreased their direct employee head count by relying upon staffing firms to provide temporary employees, or outsourcing certain functions entirely. The National Labor Relations Board, or NLRB, and the Wage Hour Division, or WHD, of the United States Department of Labor have announced new rules applicable to their review of the joint employment issues created by these changes. These new rules will expand application of traditional labor and employment laws to businesses that do not consider themselves to be the “employer” of temporary or contracted employees.

NLRB’s Treatment of Joint Employers

In Boire v. Greyhound, 376 U.S. 473, 481 (1964), the state Supreme Court held that common law concepts of employment were intended to define the employment relationship under the National Labor Relations Act, and endorsed the NLRB’s theory that two statutory employers could jointly employ a single workforce if both “possessed sufficient control over the work of the employees.” At a later stage of the case, the NLRB held that joint employer status was demonstrated by proof that two separate employers “shared, or codetermined, those matters governing essential terms and conditions of employment ….” The U.S. Court of Appeals for the Third Circuit ultimately endorsed the NLRB’s Greyhound joint employer analysis in NLRB v. Browning-Ferris Industries of Pennsylvania, 691 F.2d 1117 (3d Cir. 1982), enf’g, 259 NLRB 148 (1981). There, the court stated that: The basis of the [joint employer] finding is simply that one employer while contracting in good faith with an otherwise independent company, has retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer… Thus, the “joint employer” concept recognizes that the business entities involved are in fact separate but that they share or codetermine those matters governing the essential terms and conditions of employment.