TABLE OF AUTHORITIES ...................................................................... ii
BRIEF OF THE AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS AS AMICUS CURIAE..................................................................................1
STATEMENT OF FACTS ..........................................................................2 ARGUMENT ...............................................................................................6 1. The Board Should Abandon the Requirement of Direct and Immediate Control and Construe the Term Codetermine to Encompass Separate, Even Sequential Decisions by the Two Putative Employers that Together Set Terms or Conditions of Employment ..........................................................................6 2. The Board Should Consider a Putative Joint Employers Control of All Terms and Conditions of Employment .............13
3. The Board Should Hold that the Fact of Control Matters, Not the Reason for the Control ................................................17
4. The Board Should Hold that Authority to Control Is Sufficient ..............................................................................22
Local 254, Service Employees International Union (Women & Infants Hospital) 324 NLRB 743 (1997) ...........................................................................9, 14
Long Island Day Care Servs., 303 NLRB 112 (1991) ...........................................20
Restatement (Second) of Agency, 220(1) ...........................................................25 1
BRIEF OF THE AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS AS AMICUS CURIAE
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) files this brief as amicus curiae in response to the Boards Notice and Invitation to File Briefs. The AFL-CIO urges the Board to modify its recent, narrow applications of the joint employer standard articulated in TLI, Inc., 271 NLRB 798 (1984), and Laerco Transportation, 269 NLRB 324 (1984), in order to permit consideration of all evidence relevant to the question of whether an particular entity is a joint employer of particular employees. Briefs submitted by other amici will detail the changes in the employment relationship over the past few decades, and, in particular, the increasing division of employer authority and responsibility. 1 Despite these dramatic changes in employment relationships, the Board has not systematically considered how its existing standard applies to these new facts or whether the standard needs to be adjusted to better apply the Acts terms to the changing workplace. In fact, even though it sought briefs on this very issue 18 years ago in Jeffboat Division, American Commercial & Marine Services Co., 9- UC-406, the Boards eventual decision did not reach the question of the joint employer
1 While we do not suggest that the Boards standard should consider a putative joint employers motive regarding how it structures its employment relationships, we do suggest that the Board should not be blind to the well-documented fact that, in many instances, users contract with suppliers to supply employees precisely in order to avoid legal obligations toward those employees and often with knowledge or, at least, a good reason to expect that the supplier will not honor those obligations because its margins are too thin, it is undercapitalized, or its employees are particular vulnerable to abuse. In this case, for example, it surely is no accident that the user is contracting for the services of the lowest paid, least skilled, and most vulnerable workers in its operation.
2
standard. See M.B. Sturgis, Inc., 331 NLRB 1298 (2000). Indeed, without explanation, the Boards doctrine seems to have drifted, in several respects, in a direction that is less rather than more responsive to the changes in employment relationships. The Boards current articulations of the joint employer standard and its recent applications of the standard discount significant authority user employers 2 both possess and exercise over terms and conditions of employment, and results in decisions like the Regional Directors Decision and Direction of Election in the instant case. The user employer in this case possesses and exercises significant control over the proposed unit employees terms and conditions of employment, most importantly through its control of the facility and its operations. A proper articulation and application of the joint employer standard should result in the conclusion that the user employer is a joint employer of the employees in this case. Statement of Facts Browning-Ferris Industries (BFI) operates a recycling facility in Milpitas, CA. DDE 1. 3 BFI directly employs approximately 60 workers at the facility, including loader operators, equipment operators, forklift operators, sort line equipment operators, spotters, and one sorter. Id. at 3. These employees are primarily responsible for moving unsorted materials into the facility for sorting, and sorted materials out of the facility to other locations. Id.; Tr. 15:7-14. Nearly all of these 60 workers work on the outside of the
2 We use the terms user employer and supplier employer as those terms are defined in M.B. Sturgis, 331 NLRB at 1299.
3 DDE _ refers to the Regional Directors Decision and Direction of Election and page number. Tr. _ refers to Transcript and page number. U Ex. _ refers to Union Exhibit and number. SA _ refers to the Service Agreement between BFI and Leadpoint (Jt. Ex. 1) and page number. 3
facility. Id. They are represented by Petitioner, Sanitary Truck Drivers and Helpers Local 350. DDE at 3. The essential function of the recycling facility is the sorting of materials into separate commodities for sale. Id.; Tr. 13:2-9 (Recyclery Operations is a recycling sort process that happens inside [the Milpitas facility].). The facility contains four conveyor belts that carry distinct categories of materials into the facility. DDE 3. These are known as material streams; the four streams are residential mixed recyclables, commercial mixed recyclables, dry waste process, and wet waste process. Id. at 3-4. The materials are loaded onto the streams, and then sorted by hand by sorters along the stream. Id. at 4. BFI maintains the entire physical plant, including the conveyors, screens, and motors that are used for the sorting operation. Tr. 15:20-23. BFI has placed platforms along the lines, upon which the sorters perform their work collecting and sorting materials that travel along conveyor belts. Tr. 15:23-16:3. Sorters must be present at these work stations when the line is running in order for the plant to function. Tr. 187:1- 3. BFI only acknowledges that it employs one of the workers who perform the sorting operation. BFI contracts with Leadpoint to supply the rest of the sorters and alleges that Leadpoint is their sole employer. DDE 4. Leadpoint employs approximately 240 full-time, part-time, and on-call employees who work within the plant. Id. The vast majority of these employees are sorters; the remainder are screen cleaners and housekeepers. Id. The sorters do the physical work of removing waste from material streams that are supposed to contain recyclable items and removing recyclables from waste streams. Id. 4
Leadpoint assigns its own supervisors to the facility, including an on-site manager who reports directly to Leadpoint's corporate office. DDE 4. Leadpoint sets the schedules of individual sorters, and determines which sorters will work overtime. Id. at 11. Both companies maintain separate Human Resources departments on-site. Leadpoint sets the wages and benefits of the sorters, issues the paychecks, and is responsible for tax withholding. Id. at 5-6. However, the Service Agreement between BFI and Leadpoint provides that Leadpoint must obtain BFI's consent if it seeks to pay the sorters wages greater than BFI employees who perform the same work. Id. at 5. BFI also possesses and exercises significant authority over work hours, work days, and headcount. It sets the facilitys hours of operation, including the start and end times of each of its three shifts. DDE at 11. The shifts run from 4:00AM to 1:00PM, 2:00PM to 11:30PM, and 10:30PM to 7:00AM. Id. BFI determines which days the facility runs, and, thus, which days Leadpoint employees will work at the facility. Tr. 177:16-179:10 (Leadpoint employees assigned to BFI receive the same holidays as BFI employees, and Leadpoint is bound to supply labor every day the facility is running). BFI decides which lines will run each day and the number of sorters Leadpoint supplies. Tr. 36:1-12, 149:8-10. On at least one occasion, BFI instructed Leadpoint to permanently reduce its headcount on one line. U. Ex. 1. BFI determines whether lines will run past the scheduled end of shift, requiring the sorters to work overtime. DDE 11. It also decides when to stop the lines so the sorters can take a break. Tr. 87:3-7; 89:4-7. BFI closely monitors the work sorters perform. Its shift supervisors maintain productivity standards that require sorters on each material stream to sort a certain number of tons of material per hour, and BFI supervisors adjust the speed of the line to 5
meet those standards. Tr. 85:22-86: 2; DDE 9. BFI managers meet with Leadpoints supervisors every morning to convey the work plan for the day. Tr. 79:10-19. BFI managers are in constant contact throughout the day with Leadpoints supervisors via walkie-talkie. Tr. 104:8-19. BFI instructs Leadpoint to move sorters from one line to another based on its operational needs. Tr. 210:23-211:7. BFI managers raise performance issues they spot along the line with Leadpoint supervisors for correction. Tr. 82:16-22. On at least one occasion, a BFI manager held a meeting with Leadpoint supplied sorters to discuss quality issues. Tr. 84:12-15. After observing two Leadpoint employees drinking whiskey within the facility, BFI requested that the workers be removed from the worksite, and they were. U. Ex. 2. BFI supervisors have provided safety and equipment training to Leadpoint employees, particularly when the facility first opened. DDE 10-11; Tr. 83:1-85:5. BFI Operations Manager Paul Keck also testified that he held meetings and training sessions which Leadpoint employees attended and sometimes held educational meetings to discuss quality control and safety issues with Leadpoint sorters. Tr. 135:4-137:14; 145:6- 147:12. Leadpoint acknowledges that BFI is authorized to provide safety training to Leadpoint employees. Tr. 179:18-180:25. In fact, Leadpoint employees are required to attend meetings and trainings that BFI conducts. Tr. 245:22-248:17. The Service Agreement requires workers referred by Leadpoint to pass a drug test. SA 2. It further requires workers to comply with BFIs safety policy and maintain a drug- and alcohol-free workplace. Id. at 3-4. In response to questions about BFIs request for workers who were drinking on the job to be dismissed, BFIs division manager stated that the request reinforced BFIs worksite safety and alcohol standards. 6
Tr. 58:15-18. The Service Agreement also limits the length of time that Leadpoint sorters can work at the facility. SA 2. Argument As articulated in TLI, Inc., 271 NLRB 798, 798 (1984), the Board will find joint employment where two separate entities share or codetermine those matters governing the essential terms and conditions of employment. In particular, an employer must meaningfully affect[] matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction. Id. (citing Laerco Transportation, 269 NLRB 324, 325 (1984)). This articulation of the joint employer test has existed since the mid-1960s. See Greyhound Corp., 153 NLRB 1488, 1495 (1965). By centering the analysis on the control a putative employer possesses over employees terms and conditions, those articulations of the joint employer standard are appropriate under the Act and consistent with common law. 4 What is inconsistent with the terms of the Act, its underlying policies, and the common law, is the Boards unexplained and unjustified narrowing of the user authority and control the Board considers relevant to joint employer status. 1. The Board Should Abandon the Requirement of Direct and Immediate Control and Construe the Term Codetermine to Encompass Separate, Even Sequential Decisions by the Two Putative Employers that Together Set Terms or Conditions of Employment The Board has, without explanation or justification, applied its articulated standard in an improperly narrow manner in several respects. First, in 2002, the Board stated, The essential element in this analysis is whether a putative joint employers control over employment matters is direct and immediate. Airborne Freight Co., 338
4 We discuss infra the use of the qualifying term essential in the standard articulated in TLI. 7
NLRB 597, 597 n.1 (2002). This requirement of direct and immediate control over terms and conditions constricts the analysis such that it takes no account of significant controls user employers possess and exercise over terms and conditions. Moreover, the Board provided no rationale or explanation for characterizing direct and immediate control as [t]he essential element in the analysis. In fact, in Airborne, the Board cited only TLI, 271 NLRB at 798-99, as authority, but the earlier decision in no way suggests that direct and immediate control is essential. a. Share and Codetermine Mean Different Things, and Both are Relevant The Board has correctly stated that separate entities constitute joint employers where they share or codetermine essential terms and conditions. While the Board has never defined the terms share or codetermine, the words have clear and distinct meanings. Share refers to situations in which employers each have direct control over different terms and conditions of employment. See Merriam-Webster Online Dictionary (defining share as to divide (something) into parts and each take or use a part). This is best illustrated by a common fact-pattern in Board decisions a supplier employer that controls wages, benefits, payroll administration, hiring, and firing, and a user employer that supervises and directs the employees day-to-day work. See, e.g., Capitol EMI Music, Inc., 311 NLRB 997 (1993); Manpower, Inc., 164 NLRB 287 (1967). This type of divvying up of terms and conditions can easily be seen as sharing, but does not appear to constitute codetermining. Codetermine, then, must mean something different. Cf. UFCW Local 1996, 336 NLRB 421, 426 (2001) (provisions of Act should be construed so as not to render any superfluous). 8
The Board should define codetermination to mean the process through which two separate entities each make decisions that together establish, i.e., determine, terms and conditions of employment. This could mean that the two employers together agree to set a term of employment, as when a user and supplier establish wage rates for supplier employees in their agreement. But it should also cover the situation where each employer makes a separate determination that, taken together, set a term of employment. 5
If, as here, the user employer determines the shift hours, and the supplier employer determines shift assignments, the two employers have codetermined each employees work hours. Although not explicitly, the Board embraced this understanding of codetermination in the past. For example, in Jewell Smokeless Coal Corp., 170 NLRB 392, 393 (1968), the Board held that a mine owner was a joint employer with operators because, among other things, it provided the engineering for the mines and required the operators to mine coal in the manner it was engineered, and it inspected the mines to ensure operator employees were meeting its standards. 6
5 This understanding of the words share or codetermine is consistent with another Board formulation of the test, requiring that the joint employers take part in determining the terms and conditions of employment of the employees at issue. Capitol EMI Music, Inc., 311 NLRB at 999 (quoting Manpower, Inc., 164 NLRB at 288). An employer can take part in determining terms either by wholly determining some but not all the terms or by partly determining some or all of the terms.
6 Indeed, the description of the users control of the operation in Jewell applies equally here, substituting recyclables for coal: Jewell provides the engineering of the mines, and, in order to insure the greatest practicable recovery of merchantable and mineable coal, the operators are obliged to mine the coal in the manner in which it is engineered by Jewell. Jewell regularly inspects the mines to insure that the operations meet the Jewell standards. It is obvious that in this way, Jewell exercises considerable control over the manner and means by which the operators extract the coal. The ownership of the coal, as well as the mines, remains at all times vested in Jewell. The operators acquire no right to 9
The Boards unexplained requirement of direct and immediate control of terms and conditions of employment effectively eliminates codetermine from the standard entirely and thereby unduly narrows the inquiry. The Boards current, implicit understanding of codetermine, arising from the requirement of direct and immediate control, allows a putative employer who possesses and exercises considerable control over terms and conditions of employment to escape a collective bargaining obligation by simply inserting a supplier employer to take the last step needed to determine terms and conditions of employment. The facts of the instant case show that BFI codetermines a considerable number of the workers terms and conditions. This form of control should be taken into account under a proper application of the TLI/Laerco standard. Therefore, the Board should abandon the suggestions that the control must be direct and immediate and instead require only what Laerco required, i.e., that the user meaningfully affect overall terms and conditions of employment. 269 NLRB at 325. 7
The qualifying language, meaningfully affect, supplies the necessary and appropriate limiting principle. Thus, for example, a homeowner who retains a roofer to
sell the coal on the open market, but must deliver the coal to Jewell's tipple at a rate which Jewell sets, without regard to the operator's mining or hauling costs. Finally, the entire arrangement between Jewell and an operator can be terminated at any time, without notice or cause. 170 NLRB at 393.
7 In other cases the Board has dismissed this form of codetermination on the grounds that it was motivated by the operational concerns of the user. For example, in Local 254, Service Employees International Union (Women & Infants Hospital), 324 NLRB 743, 749 (1997), the judge (whose conclusion was affirmed by the Board) reasoned that contractual provisions affecting when work must be performed are not indicia of joint employer status because [i]t is not surprising that [the user/college] would require that cleaning be done at times most convenient for the college, or that a cleaner be available at all times to handle emergencies. Yet, all employers set hours in order to perform necessary tasks as conveniently as possible, and therefore the fact that a user may have that motive cannot render its exercise of control irrelevant. 10
replace her roof would not be the joint employer of the roofers employees because she insisted that the roofer not work on the roof after she arrived home each day. While such a stipulation arguably codetermines the employees hours at this one work site for a limited period of time and thus is relevant to the determination, standing alone, it does not meaningfully affect terms and conditions of employment. b. BFI Codetermines Terms and Conditions of the Sorters Employment, Primarily Through Its Operational Control of the Business BFI codetermines, and thus meaningfully affects, a number of essential terms and conditions of employment. By setting several criteria for personnel assigned to BFI, BFI codetermines assignment to its workplace. While the Service Agreement states that Leadpoint will recruit, interview, test, and hire personnel assigned to BFI, BFI retains the right to have such personnel meet or exceed Clients own standard selection procedures and tests. SA 2. BFI thus sets a baseline of criteria that Leadpoint must adhere to when assigning workers to BFI. Additionally, Leadpoint cannot assign an employee who has been discharged by BFI and is ineligible for rehire. Id. Workers placed at BFI must pass at least a five panel urinalysis drug screen. Id. Workers must sign a written acknowledgement prior to referral that they will perform their duties for BFI drug and alcohol free. Id. As workers cannot be assigned to BFI without meeting these criteria, BFI codetermines assignment to its workplace. BFI further codetermines terms and conditions of employment through its operational control of the business. BFI owns the property upon which the work is performed. It owns the building and machinery used in the sorting process, including the conveyors, screens, and motors. Tr. 15:20-23. BFI sets the platforms along the conveyors upon which sorters are stationed to perform their duties. Tr. 15:23-16:3; 11
187:1-5. As Leadpoint merely decides which particular workers will work on which station along the conveyors, BFI codetermines work assignments and conditions. BFI therefore codetermines the hours employees work on any given day and workload. BFI determines which lines will run each day, and the number of people needed for each particular line. Tr. 36:1-12. BFI controls the hours of operation and sets the hours for the three shifts. DDE 11. BFI decides how long the lines will run and whether overtime is required. Tr. 87:8-23; 107:19-108:3. BFI controls the speed of the line, which governs the speed at which sorting is performed. Tr. 40:14-21. 8 BFI ensures the sorters are meeting productivity standards. Tr. 42:11-16. Leadpoint decides which employees will work at BFI any given day, which shift they will work, and who will work overtime when required, and ensures the employees properly respond to changes in line speed. DDE 11, 17. BFI, therefore, codetermines the hours an employee works any given day and their workload. BFI codetermines employees safety standards. The Service Agreement requires workers to review BFIs Safety Policy. SA 3. Leadpoint is further required to provide any safety training BFI has developed to affected workers, ensure that workers wear any necessary safety equipment, ensure that workers attend any safety meetings and sign an attendance sheet, and require that the workers immediately report any accidents to Leadpoint. Id. at 3-4. BFI, therefore, imposes its own safety standards on the workers, along with any safety procedures required by Leadpoint. Additionally, because BFI
8 BFIs control of the speed of the line surely satisfied even the requirement of direct and immediate control as it affects sorters work load without any intermediate action by Leadpoint, notwithstanding the RDs suggestion that Leadpoint determines how sorters react to changes in line speed. DDE 9 & 17. 12
controls the layout of the facility, place and materials (some of which may be toxic) before the sorters, controls the speed at which the line runs, and is responsible for maintenance of the property and equipment, it codetermines the safety of the conditions under which sorters labor. BFI thus codetermines terms and conditions of employment. The Regional Directors decision discounts all of these controls and emphasizes instead the decisions directly made by Leadpoint following and constrained by BFIs determinations. Such a narrow concept of joint employment is not required by the statutory terms, is not supported by the common law, and would seriously undermine collective bargaining in this context. If BFI is not a joint employer, workers will not be able to effectively bargain over significant terms and conditions, including their hours, workload, working conditions, and safety. A broader understanding of codetermine allows the analysis to take into account the context in which the work is performed. The workers supplied by Leadpoint are the sorters within an integrated production process that separates recyclable materials from trash. BFI did not make a decision to get out of the recycling business when it contracted with Leadpoint; it merely contracted for labor to perform the sorting work within its integrated process. It still owns and operates the plant, loads the materials to be sorted onto the line, runs the line according to its productivity standards, ensures works is being performed to its quality standards, and removes the sorted materials from the facility. BFI owns the property, owns the conveyors and other equipment used for sorting, and directly employs the workers who move the material in and out of the facility. The workers supplied by Leadpoint simply perform the physical task of sorting 13
the material on the line. In this type of scenario and under all the circumstances of this case, the user employer codetermines terms and conditions of employment. 2. The Board Should Consider a Putative Joint Employers Control of All Terms and Conditions of Employment In applying its joint employer test, the Board should consider a putative joint employers control of all terms and conditions of employment. Yet some recent Board decisions focus too narrowly on hiring, firing, discipline, supervision, and direction. Member Liebman, in concurrence, criticized the focus of the Boards inquiry as unduly narrow, limited to the exercise [of] control through direct hiring, firing, discipline, supervision, and direction. Airborne Freight Co., 338 NLRB at 598. Other decisions appear to limit relevant control to that over essential terms and conditions of employment without ever defining what those are or explaining the basis for the limitation. The Board should abandon these unduly restrictive approaches and instead consider a putative joint employers control over all terms and conditions of employment. In particular, the Board has often disproportionately emphasized the significance of direct supervision and control of the manner and means of performance of the work when finding that two entities do not constitute joint employers. In many cases, the Boards emphasis on direct supervision ends up being dispositive of the joint employer inquiry. See, e.g., Computer Assocs. Intl, Inc., 332 NLRB 1166, 1166 n.2 (2000) (emphasizing that the Board place[s] particular reliance upon the . . . ongoing, close and substantial supervision of [the suppliers] employees by [the user employers] managers), revd on other grounds, 282 F.3d 849 (D.C. Cir. 2002); Quantum Resources Corp., 305 NLRB 759, 760 (1991) (finding that a joint employer relationship existed primarily because the user employer maintained considerable direct involvement in the 14
supervision of unit employees). But, direct supervision is not the only relevant form of control. In fact, the Board has, in some cases, narrowed its focus to such an extent that it has even discounted evidence of direct supervision if it did not involve control of the manner and means of performance. Thus, in AM Property Holding Corp., 350 NLRB 998, 1001 (2007), the Board stated that it has held that evidence of supervision which is limited and routine in nature does not support a joint employer finding and that it has generally found supervision to be limited and routine where a supervisors instructions consist primarily of telling employees what work to perform, or where and when to perform the work, but not how to perform the work. See also Local 254, Serv. Emp. Intl Union, 324 NLRB at 749 (finding that a user employer was not a joint employer despite the absence of any supplier supervisors on the worksite because the direct supervision of [the suppliers] employees by [the users] officials was limited . . . . ); Serv. Emp. Union, Local 87 (Trinity Bldg. Maint. Co.), 312 NLRB 715, 753 n.113 (1993) (users right to ask supplier employee to perform tasks seems to be in the nature of routine directions of what tasks [are] required . . . and not evidence of direct supervision) (quoting Southern Cal. Gas Co., 302 NLRB 456, 461 (1991)); G. Wes Ltd., 309 NLRB 225, 226 (1992) (noting the absence of evidence showing that the [users] supervisors instructed [the suppliers] employees specifically how to do the work or the manner in which they were to perform the assigned tasks and that any supervision by the users supervisors was limited and routine in nature); Flav-O-Rich, Inc., 309 NLRB 262, 265 (1992) (user not joint employer because supplier employee was capable of performing the painting and general cleaning work he was assigned to perform and 15
[the users manager] merely informed the employee where he was to work on a given day). This overly narrow focus is a product of an improper conflation of the standard for determining whether an individual is an employee or an independent contractor with the standard for determining whether a conceded employee is employed by more than one employer. The Supreme Court has instructed that resolution of the former question must begin with analysis of the hiring partys right to control the manner and means by which the product is accomplished. Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992) (quoting Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751 (1989)). But where, as here, it is conceded that the individuals at issue are employees, the focus should widen to what entities have authority to establish terms and conditions of employment, including, but not limited to, the manner and means of performance. The standard properly articulated in TLI and Laerco does not require a narrow focus on particular terms and conditions of employment. Laerco merely dictates that joint employers must meaningfully affect matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction. 269 NLRB at 325 (emphasis added). The Board should look to all the terms and conditions of employment a putative employer controls. This should include all mandatory subjects of bargaining, including working conditions and safety standards. As Justice Stewart wrote, In common parlance, the conditions of a persons employment are most obviously the various physical dimensions of his working environment. What ones hours are to be, what amount of work is expected, what periods of relief are available, what safety practices are observed, would all seem conditions of ones employment.
Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 222 (1964) (concurring). 16
In addition to the Boards overemphasis of control over the manner and means of performance, the Board has suggested that control is not relevant unless it is over essential terms and conditions of employment. See, e.g., TLI, 271 NLRB at 798. Despite using this term of limitation, the Board has never defined essential terms and conditions, nor has it explained why only control of those terms and conditions should be cognizable in the joint employer analysis. In fact, in one of the few explanations of the standard, the Board came close to defining it away. After reiterating the standard in Aldworth Co., 338 NLRB 137, 139 (2002), the Board explained, The relevant facts involved in this determination extend to nearly every aspect of employees terms and conditions of employment and must be given weight commensurate with their significance to employees work life. Id. (emphasis added). Member Raudabaugh criticized his colleagues narrow focus in Pitney Bowes, Inc., 312 NLRB 386, 386 n.1 (1993), explaining that he did not agree that a joint employer analysis should focus on essential terms and conditions of employment . . . . That analysis gives no weight at all to other terms and conditions of employment. Member Raudabaugh further explained that he would consider all terms and conditions of employment, albeit . . . attach[ing] greater importance to the essential ones. Additionally, the suggestion that only control over essential terms is relevant is sharply discordant with the Boards holding in Management Training Corp., 317 NLRB 1355, 1357 (1995), concerning when the Board will assert jurisdiction over a conceded employer, but one with limited ability to affect some terms and conditions of its employees employment. Rejecting the proposition that employees should not have a right to petition for representation for the purpose of collective bargaining with such an 17
employer, the Board stated categorically, Nor should the Board be deciding as a jurisdictional question which terms and conditions of employment are or are not essential to the bargaining process. Id. Rather, the Board concluded, The Employer in question must, by hypothesis, control some matters relating to the employment relationship, or else it would not be an employer under the Act. Id. at 1358. Control of some matters is also sufficient here. Rejection of these unfounded, narrow approaches will not lead to a slide down the slippery slope to a holding that a vending machine company is a joint employer of factory employees because it sets the price of sodas in the break room, cf. Ford Motor Co. v. NLRB, 441 U.S. 488 (1979), because, standing alone, setting soda prices would not meaningfully affect terms and conditions of employment. The presence of the vending machine company at the bargaining table would add nearly nothing and would therefore not be required to ensure meaningful collective bargaining. Rather, as with our proposed definition of the term codetermine, such an approach would merely allow the Board to consider all relevant facts. 3. The Board Should Hold that the Fact of Control Matters, Not the Reason for the Control The Boards application of its own express standard inexplicably and unjustifiably turns on the reason for control, instead of simply the fact of control. In particular, the Board disregards control retained or asserted by a putative employer in order to comply with various forms of government regulation and control retained or asserted as a property owner. See, e.g., Aldworth Co., 338 NLRB at 139 ([A]ctions taken pursuant to government statutes and regulations are not indicative of joint employer status, and 18
therefore we do not rely on those actions in reaching our determination.); 9 Goodyear Tire & Rubber Co., 312 NLRB 674, 677 (1993) (affirming an ALJs holding that control evidence either mandated by contract or mandated by Government regulation is not evidence of a joint employer relationship); Hychem Constructors, Inc., 169 NLRB 274, 276 (1968) (dismissing evidence that user which owned premises imposed rules on supplier employees on the grounds that [t]he promulgation of such rules, which seek to insure safety and security, is a natural concomitant of the right of any property owner or occupant to protect his premises); Service Employees Union, Local 87, 312 NLRB at 753 n.113 (user/owners right to replace supplier employee merely is that of an owner or occupant protecting his premises and not that of a joint employer); Southern Cal. Gas Co., 302 NLRB at 461 (An employer receiving contracted labor services will of necessity exercise sufficient control over the operations of the contractor at its facility so that it will be in a position to take action to prevent disruption of its own operations . . . . It follows that the existence of such control does not indicate joint employer status). It makes little sense for the Board to discount the fact of control based on its motive. The determination of employer status is not governed by principles of intent or voluntariness. Rather, it is based on the presence or absence of the requisite objective factors. For that reason, the Board has never explained why control exercised based on government mandate should be ignored beyond the tautological statement in Aldworth that such actions are not reliable indicators of joint employer status. 338 NLRB at 140. Under this holding, no matter how extensive the users regulation of terms and conditions
9 In Aldworth, the Board not only discounted control exercised based on a government mandate but also benefits extended to employees by the putative joint employer in order to obtain tax advantages. 338 NLRB at 140. 19
and how central those terms and conditions are to employees and how much discretion the user has over how to comply with the legal mandate, the users control over terms and conditions is given no weight. But the reason why a putative joint employer retains or exercises a right of control does not in any way diminish the fact or the significance of that control or its potential effect on working conditions. The only situation in which looking to the reason for control may be appropriate is where a law or regulation leaves a putative joint employer with no discretion whatsoever. Other than that situation, the reason for the control should not matter. A party that is legally obligated to control working conditions to comply with government regulations can engage in meaningful bargaining regardless of what spurred that party to exercise the control. 10
Prior to the mid-1980s, the Board recognized this basic point, holding that [t]he fact that the employer is required by Government regulations to control the means and manner in which the [employees] perform the Employers [work] does not diminish the validity of our findings that such controls show an employment relationship. Rediehs Interstate, Inc., 255 NLRB 1073, 1077 (1980). 11 The actual relationship between the employer and [the employees], rather than the reasons for the relationship, is the critical
10 Indeed, the fact that Congress, a state legislature or another federal or state agency imposed an obligation on an entity to control particular working conditions of a set of workers strongly suggests that responsible government officials believed that the entity had both the power to establish those conditions and that the entity stood in a relationship with the workers such that it was appropriate for it to do so.
11 We note that this case and several others cited in this and the following section of our brief actually involved the question of whether the workers at issue were employees or independent contractors rather than whether they were employed by more than one employer. But the Boards joint employer and independent contractor jurisprudence have run parallel to each other on these issues, sometimes improperly, as we point out in Section 2 above.
20
consideration. Id. See also Mitchell Bros. Truck Lines, 249 NLRB 476 (1980). Cf. Goodyear, 312 NLRB at 677 (acknowledging that the Board has been inconsistent in the manner in which it has handled control evidence . . . mandated by . . . government regulation). Thus, the Board gave weight to authority imposed by law in its joint employer determinations. 12
Furthermore, discounting control asserted to comply with government regulation is inconsistent with the Boards jurisprudence under Section 8(a)(5) regarding a conceded employers duty to bargain when it has a legal duty to exercise control over certain working conditions. As explained in Watsonville Newspapers, LLC, 327 NLRB 957, 958-59 (1999), the Board will only excuse unilateral changes in terms and conditions in response to government regulation where the regulation leaves the employer no discretion over how to comply. The Board will, however, find an 8(a)(5) violation where respondents could have bargained regarding the discretionary action taken to comply with the law. Id. at 959. See also Dickerson-Chapman, Inc., 313 NLRB 907, 942 (1994) (failure to bargain over which employees employer must designate as competent persons under OSHA regulation violated 8(a)(5)); Long Island Day Care Servs., 303 NLRB 112, 116 & 117 (1991) (duty to bargain about distribution of federal grant when there were decisions within the [employers] discretion on which bargaining could focus, but no duty when there was nothing of substance to bargain about); Hanes Corp., 260 NLRB 557, 562-63 (1982) (failure to bargain over which of three OSHA- compliant respirators employer required employees to adopt violated 8(a)(5)). In other
12 When the Board overruled these decisions in Container Transit, Inc., 281 NLRB 1039, 1039 n.4 (1986), it provided no rationale. 21
words, if the user was the sole employer of the employees, it would clearly have a duty to bargain with a duly chosen representative about terms and conditions it has a legal duty to control. If discretionary responses to government regulations are mandatory subjects of bargaining, they should certainly be considered indicia of control in a joint employer determination. In this case, BFI had a legal duty to maintain a safe workplace for sorting employees. California law requires employers to furnish employment and a place of employment that is safe and healthful for the employees therein. Cal. Lab. Code 6400(a). In the multiemployer context, the California Division of Occupational Safety and Health (Cal/OSHA) may cite a user employer for creating a hazard to which it exposes any employees who are on its premises. See id. 6400(b)(2) & (4); Cal. Code Regs. tit. 8, 336.10. Additionally, a user employer which is responsible, by contract or through actual practice, for safety and health conditions on the worksite may be cited for exposing employees on its premises to unsafe conditions. See Cal. Lab. Code 6400(b)(2) & (3). 13 The Board should not ignore or discount the control retained and exercised by BFI in order to comply with these legal duties. Similarly, the Board should not discount control exercised by a user employer by virtue of its status as the owner of the property where supplier employees work. See, e.g., Hychem Constructors, 169 NLRB at 276; Serv. Emp. Union, Local 87, 312 NLRB at 753
13 Although California operates a state plan to administer the federal Occupational Safety and Health Act, see Cal. Lab. Code 50.7(a), federal law creates analogous duties for user employers on multiemployer worksites. See Occupational Safety & Health Admin., Dept of Labor, CPL 02-00-124, OSHA Instruction: Multiemployer Citation Policy (Dec. 10, 1999). This policy requires a user employer with general authority over the worksite to correct safety and health violations and to avoid causing hazardous conditions that violate OSHA regulations. See id. 22
n.113; Southern Cal. Gas Co., 302 NLRB at 461. As with control that is exercised in order to comply with a legal duty, control that arises out of ownership of the workplace or that is motivated by such ownership is no less control over terms and conditions of employment. After all, all things being equal, it is certainly more likely that an entity that owns the property where employees work is their employer than an entity that does not own the property. User/owners typically require the suppliers employees to abide by the users rules when they enter the premises. The user may impose these restrictions on the employees in the service agreement or by directly enforcing the rules of the workplace. These rules often govern mandatory subjects of bargaining, such as the hours and days of the week when work may be performed, uniforms or other insignia, security procedures, drug and alcohol screening, and safety protocols. See, e.g., S.S. Kresge Co. v. NLRB, 416 F.2d 1225, 1230 nn. 8 & 9 (6th Cir. 1969); Gallenkamp Stores Co. v. NLRB, 402 F.2d 525, 529 (9th Cir. 1968). Wholly discounting these forms of control by attributing them to ownership of the workplace simply makes no sense. In applying its joint employer standard, the Board should consider all control possessed and exercised by a putative joint employer in determining whether, considered as a whole, the entity meaningfully affects terms and conditions of employment. 4. The Board Should Hold that Authority to Control Is Sufficient Finally, the Boards constricted application of its joint employer standard has led it to disregard a putative joint employers authority to control terms and conditions of employment and recognize only control that is actually exercised. For instance, in AM Property Holding Corp., 350 NLRB at 1000, the Board discounted a contractual provision that subjected the suppliers employees to initial approval by the user 23
employer. The Board stated that it did not rely merely on the existence of such contractual provisions, but rather looks to the actual practice of the parties. Id. In a partial concurrence, Member Liebman observed that the Boards application of this test yielded troubling results, whereby although the user employer, in a very real sense, determined who worked at the building, because the record evidence does not conclusively establish that [the user employer] was directly involved in actual hiring decisions with respect to individual employees, it was not held to be a joint employer. 350 NLRB at 1012. See also Goodyear, 312 NLRB at 677 (concluding that an operational control clause . . . was not evidence of actual control because it did not meaningfully affect . . . hiring, firing, disciplining, daily supervision, and direction and focusing instead on the actual handling of day-to-day business); TLI, 271 NLRB at 798-99 (finding a contractual provision stating that a user employer would maintain operational control, direction, and supervision of the suppliers employees to be insufficient to establish a joint employer relationship); Southern Cal. Gas Co., 302 NLRB at 461. This was not always the case. The Board previously found the power to control or affect working conditions sufficient to establish a joint employer relationship. For example, in Cabot Corp., 223 NLRB 1388 (1976), the Board observed that the determining factor in an owner-contractor situation is whether the owner exercises, or has the right to exercise, sufficient control over the labor relations policies of the contractor or over the wages, hours, and working conditions of the contractors employees from which it may be reasonably inferred that the owner is in fact an employer of the employees. Id. at 1388 (emphasis added).
24
The earlier approach had deep roots in the Boards case law. For example, in Taylors Oak Ridge Corp., 74 NLRB 930, 932 (1947), the Board found a joint employer relationship premised on the user employers contractual right of control regardless of whether the contractual right had been exercised. That the Employers power of control may not in fact have been exercised is immaterial, since the right to control, rather than the actual exercise of that right, is the touchstone of the employer-employee relationship. Id. See also Jewel Tea Co., 162 NLRB 508, 510 (1966); Hoskins Ready- Mix Concrete, Inc., 161 NLRB 1492, 1493 & n.2 (1966); Spartan Dept Stores, 140 NLRB 608, 609 (1963); Frostco Super Save Stores, Inc., 138 NLRB 125, 127-28 (1962); General Motors Corp., 60 NLRB 81, 83-84 (1945); Bethlehem-Fairfield Shipyard, Inc., 53 NLRB 1428, 1431 (1943); Solvay Process Co., 26 NLRB 650, 655-56 (1940); Sierra Madre-Lamanda Citrus Assn, 23 NLRB 143, 149-50 (1940). In West Texas Utilities Co., 108 NLRB 407, 414 (1954), the service agreement authorized [the user employer], in its discretion, to control the tenure of the [supplier employers] employees on the project. The Board described the relationship between the user and supplier employers as that of dual employers insofar as the hire and tenure of employees on the project was concerned, with [the supplier] having the primary right to hire and discharge and the [user] having the contractual right to veto [the suppliers] determination in these matters. Indeed, as the Board held in Thriftown, Inc., 161 NLRB 603, 607 (1966), in finding a joint employer relationship, [s]ince the power to control is present by virtue of the operating agreement, whether or not exercised, we find it unnecessary to consider the actual practice of the parties regarding these matters as evidenced by the record. 25
The Boards earlier position is consistent with the common law, which looks to the putative employers authority over the worker in question, and not the actual exercise of that authority to determine whether an employment relationship existed. See Restatement (Second) of Agency, 220(1). Under this [common law] test, it is the right to control, and not actual control or supervision, which is important. Mitchell Bros., 249 NLRB at 479-80. The Third Circuits observation over sixty years ago in considering contractual controls that provided that the operation of all leased vehicles and equipment shall [be] under exclusive and direct supervision and control of [the] Company remains on point: [i]f the Company has not reserved by this language the right to control the manner and means of driving these tractor-trailers and loading and unloading them, there are not words in the English language capable of doing so. Nu-Carriers v. NLRB, 189 F.2d 756, 758-59 (3d Cir. 1951). The Boards earlier approach is also consistent with its supervisor determinations. The Board has long held that the possession of authority is sufficient to find individuals to be supervisors under the Act, regardless of whether that authority is exercised. See, e.g., Pepsi-Cola Co., 327 NLRB 1062, 1064 (1999) (disputed individuals possess the authority to discharge and that authority is sufficient to find them to be statutory supervisors, even where some of the individuals had not exercised the authority); King Trucking Co., 259 NLRB 725, 729 (1981) (The fact that [disputed individual] was authorized to discharge employees, without more, is sufficient to show that he was a supervisor.) (citing Ohio Power Co. v. NLRB, 176 F.2d 385, 387 (6th Cir. 1949) (It is the existence of the power which determines the [supervisor] classification.)). Authority 26
to control is sufficient to find of supervisory status under the Act; 14 it should be the same for joint employer determinations because both determinations are intended to identify entities (or individuals) that stand in a position of authority over employees terms and conditions of employment. 15
The user employer is not compelled to contract for authority to control workers terms and conditions of employment but does so for a reason. Whether it has exercised that authority or not at the time of analysis is solely within its discretion. And, if the user employer does decide to exercise its authority, even when it has not done so in the past, the supplier employer is bound to and will almost surely comply. A supplier employer, like Leadpoint, providing nothing but labor, typically has no economic leverage, and little incentive, to deny the user employers demand. That is particularly the case when, as in the instant case, the user employer can terminate the Service Agreement on short notice. See SA 1 (Service Agreement may be terminated by either party with 30 days notice).
14 Of course, as in the supervisor context, a putative joint employer could attempt to prove that the terms of its agreement with a supplier granted it mere paper authority. North Miami Convalescent Home, 224 NLRB 1271, 1272 (1976). See, e.g., Lucky Cab Co., 360 NLRB No. 43 (Feb. 20, 2014), slip op. at 2 (crediting testimony that certain workers do not possess the authority stated in the [employee] handbook, and rejecting an ALJs reliance on the paper authority set forth in the handbook). But where the authority is the product of a bargained exchange embodied in a binding contract in contrast to a unilaterally promulgated position description or handbook, carrying that burden of proof is unlikely, particularly where, as explained below, the authority is exercised on even a sporadic basis or in a routine manner.
15 We note that Section 2(11) expressly states that [t]he term supervisor means any individual having authority, in the interest of the employer, to . . . . while Section 2(2) has no parallel language. 29 U.S.C. 152(11) (emphasis added) & (2). But Congress inclusion of that language in the definition of supervisor should suggest that having authority is also sufficient to render an entity an employer given the absence of a precise definition in Section 2(2). 27
BFI retains significant authority over workers in the Service Agreement. SA 1. It places a cap on wages, which can only be raised with BFIs consent. Id. (caps wages at rates BFI pays for same work). BFI caps the tenure of workers assigned to its facilities at six months. Id. at 2. BFI retains the right to reject or discontinue the use of any Leadpoint worker at any time and for any or no reason. Id. at 4. BFI possesses the authority to deny payment to Leadpoint for any hours worked where the worker fails to have a BFI manager sign his/her timecard. Id. It is clear that BFI retains authority over significant terms and conditions of employment. And, due to BFIs economic leverage over Leadpoint, this authority is real, whether BFI uses its discretion to exercise it or not. This retained authority is often evidenced by sporadic examples of direct supervision or direction that the Board has dismissed as limited and routine. See, e.g., AM Prop. Holding Corp., 350 NLRB at 1001. But such exercises of authority should not be disregarded on that grounds. This is especially the case where the workers are providing unskilled labor, or where the workers are highly skilled. In neither case is continuous supervision or direction by the user employer required. In relation to both these categories of employees, the Board and courts have often recognized that a user employer has authority over working conditions even if it is seldom necessary to exercise such authority. As the First Circuit held, [t]hat the referred employees were professional nurses who may not have required much instruction as to how to perform their work does not negate the power of supervision and direction that [the user] exercised over them once they reported for work. Holyoke Visiting Nurses Assn v. NLRB, 11 F.3d 302, 307 (1st Cir. 1993). The absence of need to control should not be confused with the absence of right to control. The right to control contemplated by . . . the common law as an 28
incident of employment requires only such supervision as the nature of the work requires. McGuire v. United States, 349 F.2d 644, 646 (9th Cir. 1965). As the Board recognized decades ago, [t]he facts and circumstances from which possession of such power to control may be determined vary from case to case, and are dependent in large measure upon the nature of the functions in question and the degree to which the possibility of detailed supervision is present in such functions. San Marcos Tel. Co., 81 NLRB 314, 317 (1949). Among unskilled employees it is also true that where the nature of a persons work requires little supervision, there is no need for actual control. Air Terminal Cab, Inc. v. United States, 478 F.2d 575, 580 (8th Cir. 1973). As the Fifth Circuit observed in holding unskilled crab pickers to be employees, [t]hough [the putative employer] did not control the intimate details of the pickers work, the degree of control necessary for a particular endeavor is of necessity commensurate with the nature of that task. Picking crabs is a simple task that does not require much supervision. Breaux and Daigle, Inc. v. United States, 900 F.2d 49, 52 (5th Cir. 1990). The record contains several examples where BFI has sporadically directed workers in the proposed unit. BFI managers come to the line and instruct workers on what materials to remove. Tr. 244:22-245:10; 222:2-6; 282:6-19. BFI also held a meeting instructing swing shift workers what items need to be sorted out and what items receive priority. Tr. 246:17-23; 259: 24260:5. The Regional Director discounted these and other examples as merely routine in nature, and thus concluded that they did not evidence the requisite joint control of daily work. DDE 18. But these examples show BFIs retained control over sorters working in its facility. BFI establishes the procedures 29
for sorting materials at its facility; it trains the Leadpoint supervisors so that those supervisors can train the line workers; and it ensures compliance through direction when it views workers failing to comply with its procedures. That those instances of direction are sporadic is a sign that the unskilled work does not require constant supervision and direction by BFI, not that BFI does not control the employees daily work. Conclusion In Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964), the Supreme Court recognized that whether [a user employer] possesse[s] sufficient indicia of control to be an employer [under the NLRA] is essentially a factual issue. The adjustments of the Boards standard and its application we suggest here will permit the Board to consider all relevant facts in making that increasingly important determination.
I, Maneesh Sharma, hereby certify that on June 26, 2014, I caused to be served a copy of the foregoing Brief on behalf of the American Federation of Labor and Congress of Industrial Organizations as Amicus Curiae in Browning-Ferris Industries, Case 32-RC- 109684, by electronic mail on the following:
Via E-Mail: Lester Heltzer, Executive Secretary Office of the Executive Secretary National Labor Relations Board 1099 14th Street N.W., Room 11602 Washington, D.C. 20570-0001
Thomas M. Stanek Elizabeth M. Townsend Ogletree, Deakins, Nash, Smoak & Stewart, P.C. 2415 E. Camelback Road, Suite 800 Phoenix, AZ 85016 Email: Thomas.stanek@ogletreedeakins.com Elizabeth.townsend@ogletreedeakins.com
Michael G. Pedhirney Littler Mendelson 650 California Street, 20th Floor San Francisco, CA 94108 Email: mpedhirney@littlermendelson.com
Adrian Barnes Beeson, Tayer & Bodine, APC 483 9th Street Oakland, CA 94607 Email: abarnes@beesontayer.com