Franchisors recently got a little jolt of confidence that perhaps not every franchise relationship would create a joint employment relationship under the National Labor Relations Board Browning-Ferris Industries, 362 NLRB No 186 decision.
On October 21, 2015, the Green Jobworks -ACECO NLRB decision was issued by the Region 5 Regional Director. This was the first decision addressing joint employment since the Browning-Ferris decision.
In the Green JobWorks case, the Union unsuccessfully argued that ACECO and Green JobWorks (“GJW”) were joint employers. The two companies had entered into a master services agreement under which GJW provided temporary labor to ACECO. Under the agreement, employees supplied to ACECO could be terminated by ACECO if the employee violated a safety rule. However, GJW had the exclusive right to hire, train, assign, and discipline employees for other than safety violations. GJW also carried Workers’ Compensation insurance for the employees and paid all employer payroll taxes and wages.
After reviewing the matter, the Regional Director determined that GJW and ACECO were not joint employers. In doing so, the Regional Director noted that GJW had almost exclusive control of hiring and firing as well as the payment of wages and benefits. The Regional Director declined to hold that ACECO was a joint employer simply because it could terminate an employee in limited circumstances where there was a safety violations.
This decision should give franchisors some comfort if it stands. However, whether it stands remains to be seen. The Union has filed a Request for Review of the Regional Director’s decision. GJW and ACECO filed their opposition to the Request for Review on November 11, 2015.
We will keep you informed of the progress of this one.