Sanitary Truck Drivers & Helpers Local 350 v. Nat'l Labor Relations Bd.
| Decision Date | 29 July 2022 |
| Docket Number | 21-1093 |
| Citation | 45 F.4th 38 |
| Parties | SANITARY TRUCK DRIVERS AND HELPERS LOCAL 350, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent Browning-Ferris Industries of California, Inc., d/b/a Newby Island Recyclery, Intervenor |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Maneesh Sharma argued the cause for petitioner. With him on the briefs were Susan K. Garea and Harold Craig Becker.
Milakshmi V. Rajapakse, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Jennifer A. Abruzzo, General Counsel, Ruth E. Burdick, Deputy Associate General Counsel, David Habenstreit, Assistant General Counsel, and Julie Brock Broido, Supervisory Attorney.
Joshua L. Ditelberg and Stuart Newman were on the brief for intervenor for respondent Browning-Ferris Industries of California, Inc.
Before: Millett, Wilkins, and Jackson* , Circuit Judges.
Intervenor Browning-Ferris Industries of California, Inc. ("Browning-Ferris") operates a recycling plant in Milpitas, California, where it employs about 60 workers. Browning-Ferris contracts with Leadpoint Business Services ("Leadpoint"), which provides Browning-Ferris with approximately 240 additional recyclery workers. In July 2013, Petitioner Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters (the "Union") filed a petition with the National Labor Relations Board ("NLRB" or "Board") to represent Leadpoint's recyclery workers, asserting that Browning-Ferris and Leadpoint are joint employers of Leadpoint's workers. The rights and duties of the various parties to this dispute have been extensively litigated before the NLRB.
The Union now urges us to vacate two of the NLRB's recent orders, in which the Board declined to hold Browning-Ferris to be a joint employer under the National Labor Relations Act ("NLRA" or "Act"). For the reasons set forth below, we grant the Union's petition and vacate the challenged orders.
We previously set forth facts relevant to the instant petition in a prior opinion. See Browning-Ferris Indus. of Cal., Inc. v. NLRB , 911 F.3d 1195 (D.C. Cir. 2018). Assuming familiarity with the factual and procedural history of the case, we repeat only those details necessary to our resolution of this petition.
As mentioned, in July 2013, the Union filed a petition with the NLRB to represent Leadpoint's recyclery workers, contending that Leadpoint and Browning-Ferris are joint employers. In August 2013, the Board's Acting Regional Director—applying the NLRB's then-standard "joint employer" test from TLI, Inc. , 271 NLRB 798, 798–99 (1984), enforced mem. , 772 F.2d 894 (3d Cir. 1985), as modified by subsequent cases—found that Leadpoint is the sole employer of its recyclery workers at Browning-Ferris's facility. The Acting Regional Director reasoned that Browning-Ferris was not a joint employer for purposes of the NLRA because it did not exercise "direct and immediate" control over Leadpoint workers’ essential terms and conditions of employment—such as hiring, firing, or discipline. J.A. 263 (citing TLI, Inc. , 271 NLRB at 798–99 ).
The Union sought the Board's review of the Acting Regional Director's decision. In August 2015, the Board issued an order in which it overruled TLI and announced a revised joint-employer test. Browning-Ferris Indus. of Cal., Inc. , 362 NLRB 1599, 1613–15, (2015) (" Browning-Ferris I "). In Browning-Ferris I , the Board reasoned that evidence of indirect control can establish joint-employer status. Id. at 1600. The Board also determined that a putative employer's reserved powers of control—even when unexercised—are "clearly relevant to the joint-employment inquiry." Id. To that end, the Board determined—"based on a full assessment of the facts"—that Browning-Ferris is a joint employer of Leadpoint's employees because it exercises reserved, indirect, and direct control over them. Id. at 1614–15.
Thereafter, the NLRB's General Counsel issued an unfair labor practice complaint alleging that Browning-Ferris and Leadpoint, as joint employers, violated the NLRA by refusing to bargain with the Union. Browning-Ferris petitioned for judicial review of Browning-Ferris I . This Court mostly upheld the Board's ruling in Browning-Ferris I , but it remanded to the Board to "rearticulat[e]" the indirect-control element of its new joint-employer test in a way that would conform with the common law, to "meaningfully apply" and explain the second part of its new two-step test, and to consider whether retroactive application of its new test was proper. Browning-Ferris , 911 F.3d at 1221–22.
Upon this Court's limited remand, the Board took a different course. In July 2020, the Board held that it was manifestly unjust to apply its new rule in Browning-Ferris I to these parties, affirmed the Acting Regional Director's original decision finding that Browning-Ferris was not a joint employer, and dismissed the General Counsel's unfair labor practice complaint against Browning-Ferris. Browning-Ferris Indus. of Cal., Inc. , 369 NLRB No. 139, at *6 (2020) (" Browning-Ferris II "). Instead, the Board issued an order in which it announced a revised joint-employer test, held that Browning-Ferris is not a joint employer of Leadpoint's employees, and dismissed the General Counsel's unfair labor practice complaint against Browning-Ferris. Id. at *6.
The Union moved for reconsideration of Browning-Ferris II , but the Board denied the motion. Browning-Ferris Indus. of Cal., Inc. , 370 NLRB No. 86, at *1 (2021) (" Browning-Ferris III "). The Union then filed the instant petition seeking judicial review of the Board's rulings in Browning-Ferris II and Browning-Ferris III . For the reasons discussed below, we grant the Union's petition and vacate the challenged orders.
Prior to the 2015 Browning-Ferris I decision, the Board's "longstanding joint-employer standard" was one "under which ‘two or more statutory employers are joint employers of the same statutory employees if they share or codetermine those matters governing the essential terms and conditions of employment.’ " Browning-Ferris , 911 F.3d at 1205 (quoting Browning-Ferris I , 362 NLRB at 1600 ) (some internal quotation marks omitted). But in Browning-Ferris I , the Board announced that it would apply that standard in a new way:
In determining whether a putative joint employer meets this standard, the initial inquiry is whether there is a common-law employment relationship with the employees in question. If this common-law employment relationship exists, the inquiry then turns to whether the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.
362 NLRB at 1600. The Board clarified that it would not require that "a statutory employer's control must be exercised directly and immediately." Id. Rather, "[i]f otherwise sufficient, control exercised indirectly--such as through an intermediary--may" be sufficient to "establish joint-employer status." Id.
In our 2018 ruling, we held that "[t]he Board ... correctly determined that the common-law inquiry is not woodenly confined to indicia of direct and immediate control; an employer's indirect control over employees can be a relevant consideration." Browning-Ferris , 911 F.3d at 1209. But "[i]n applying the indirect-control factor in this case ... the Board failed to confine it to indirect control over the essential terms and conditions of the workers’ employment." Id. Accordingly, we remanded "that aspect of the decision to the Board for it to explain and apply its test in a manner that hews to the common law of agency." Id.
Importantly, before the Court issued its decision in 2018, the Board initiated a rulemaking proceeding to establish standards for determining joint-employer status. See The Standard for Determining Joint-Employer Status, 83 Fed. Reg. 46,681 (Sept. 14, 2018). In February 2020, the Board issued a final rule that reinstated a clarified version of the joint-employer standard that was in place prior to Browning-Ferris I . See Browning-Ferris II , 369 NLRB at *1 n.3 (citing Joint Employer Status Under the National Labor Relations Act, 85 Fed. Reg. 11,184 (Feb. 26, 2020) ("2020 Rule")). The 2020 Rule applied prospectively, so the Board did not apply it to this dispute. Id .
In July 2020, on remand from this Court, the Board issued Browning-Ferris II , in which it held that it would be manifestly unjust to apply the rule announced in Browning-Ferris I retroactively to find Browning-Ferris a joint employer. Browning-Ferris II , 369 NLRB at *5. The Board declared in Browning-Ferris II that retroactive application of Browning-Ferris I was improper because "for at least 30 years preceding [ Browning-Ferris I ,] ... there was a clear rule of law requiring proof of direct and immediate control under the applicable joint-employer test." Browning-Ferris II , 369 NLRB at *5. "Indeed, numerous comments filed in our recent joint-employer rulemaking proceeding made abundantly clear that many businesses did rely on that legal standard." Id. Therefore, "the new standard adopted in the 2015 decision would substantially affect reasonable, settled expectations for relationships established on the basis of the prior standard." Id.
The Board acknowledged that this Court's remand "sought clarification and redress of two critical shortcomings in the Board's discussion of its new joint-employer standard," but the Board concluded that "there is no variation or explanation of that standard that would not incorporate its substantial departure from the prior direct and immediate control legal standard." Id. As such, the Board was reticent to apply Browning-Ferris I retroactively to the dispute.
"In determining whether retroactive application will work a manifest injustice, the Board typically considers the reliance of ...
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