Browning-Ferris Indus. of Cal., Inc. v. Nat'l Labor Relations Bd., No. 16-1028

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: Millett, Circuit Judge
• Citation: 911 F.3d 1195
• Parties: BROWNING-FERRIS INDUSTRIES OF CALIFORNIA, INC., Doing Business as BFI Newby Island Recycling, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent Teamsters Local 350, Intervenor
• Docket Number: No. 16-1028,16-1064,C/w 16-1063
• Decision Date: 28 December 2018

911 F.3d 1195

BROWNING-FERRIS INDUSTRIES OF CALIFORNIA, INC., Doing Business as BFI Newby Island Recycling, Petitioner
v.
NATIONAL LABOR RELATIONS BOARD, Respondent

Teamsters Local 350, Intervenor

No. 16-1028
C/w 16-1063
16-1064

United States Court of Appeals, District of Columbia Circuit.

Argued March 9, 2017
Decided December 28, 2018

Joshua L. Ditelberg, Chicago, IL, argued the cause for petitioner. With him on the briefs was Stuart Newman, Atlanta, GA.

Greg Abbott, Governor, Office of the Governor for the State of Texas, and Adam W. Aston, Deputy General Counsel at the time the brief was filed, Office of the Attorney General for the State of Texas, were on the brief for amicus curiae the Governor of Texas in support of petitioner.

Linda E. Kelly, Washington, DC, Peter Kirsanow, Maynard A. Buck, Cleveland, OH, and Richard Hepp were on the brief for amici curiae National Association of Manufacturers, et al. in support of petitioner.

Robert M. Loeb, Washington, DC, Naomi Mower, Jeremy Peterman, Washington, DC, and Tom Burt, Redmond, WA, were on the brief for amici curiae Microsoft Corporation and HR Policy Association in support of petitioner.

Ronald Meisburg, Andrea R. Calem, Washington, DC, and Kurt G. Larkin, Richmond, VA, were on the brief for amici curiae Associated Builders and Contractors, et al. in support of petitioner.

Richard A. Samp, Washington, DC, was on the brief for amicus curiae Washington Legal Foundation in support of petitioner.

Adam G. Unikowsky, Washington, DC, Kathryn Comerford Todd, Steven P. Lehotsky, and Warren Postman were on the brief for amici curiae The Chamber of Commerce of the United States of America and The Retail Litigation Center, Inc. in support of petitioner.

Joel A. Heller, Attorney, National Labor Relations Board, was on the brief for respondent. With him on the brief were Richard F. Griffin, Jr., General Counsel at the time the brief was filed, John H. Ferguson, Associate General Counsel at the time the brief was filed, Linda Dreeben, Deputy Associate General Counsel, and Jill A. Griffin, Supervisory Attorney.

Harold Craig Becker argued the cause for intervenor. With him on the brief were James B. Coppess, Washington, DC, Maneesh Sharma, Pittsburgh, PA, Teague P. Paterson, and Susan K. Garea.

P. David Lopez, General Counsel at the time the brief was filed, Jennifer S. Goldstein and Gail S. Coleman, Attorneys, Equal Employment Opportunity Commission, were on the brief for amicus curiae Equal Employment Opportunity Commission in support of respondent.

Before: Millett and Wilkins, Circuit Judges, and Randolph, Senior Circuit Judge.

Dissenting opinion filed by Senior Judge Randolph.

Millett, Circuit Judge:

911 F.3d 1199

Browning-Ferris Industries of California, Inc. operates one of the largest recycling plants in the world. To operate its plant, Browning-Ferris contracts with Leadpoint Business Services to provide workers to sort through the incoming material, clear jams that occur in the sorting process, and keep the sorting areas clean. In 2013, a local union petitioned to represent those workers as a bargaining unit under the National Labor Relations Act, see 29 U.S.C. § 159(a), designating Browning-Ferris and Leadpoint as "joint employers" of the workers.

In concluding that Browning-Ferris and Leadpoint were joint employers of the workers in the petitioned-for unit, the National Labor Relations Board ruled that it would consider a putative joint employer's reserved right to control the workers at issue, as well as any indirect control exercised over the workers, as among a number of factors relevant to determining joint-employer status. Browning-Ferris challenges both of those aspects of the Board's test.

We hold that the right-to-control element of the Board's joint-employer standard has deep roots in the common law. The common law also permits consideration

911 F.3d 1200

of those forms of indirect control that play a relevant part in determining the essential terms and conditions of employment. Accordingly, we affirm the Board's articulation of the joint-employer test as including consideration of both an employer's reserved right to control and its indirect control over employees' terms and conditions of employment. But because the Board did not confine its consideration of indirect control consistently with common-law limitations, we grant the petition for review in part, deny the cross-application for enforcement, dismiss without prejudice the application for enforcement as to Leadpoint, and remand for further proceedings consistent with this opinion.

I

A

Congress enacted the National Labor Relations Act of 1935, 29 U.S.C. § 151 et seq. , to "protect the right of workers to act together to better their working conditions," NLRB v. Washington Aluminum Co. , 370 U.S. 9, 14, 82 S.Ct. 1099, 8 L.Ed.2d 298 (1962), and to "promot[e] stable collective-bargaining relationships," Auciello Iron Works, Inc. v. NLRB , 517 U.S. 781, 790, 116 S.Ct. 1754, 135 L.Ed.2d 64 (1996). To that end, the Act mediates the relationship between "employees" and "employers" by, among other things, conferring upon employees a right to unionize, 29 U.S.C. § 157, prohibiting employers from engaging in specified unfair labor practices, id. § 158(a), and imposing obligations on employers to collectively bargain with representatives of employees, id. § 158(d). The National Labor Relations Board is charged with administering the Act. Id. § 153; NLRB v. SW General, Inc., ––– U.S. ––––, 137 S.Ct. 929, 937, 197 L.Ed.2d 263 (2017).

But how do those statutory obligations on employers work when an employee has more than one putative employer? After all, a Board order that an employer bargain with a union over the terms and conditions of employment may well be futile if another entity, not subject to an order to bargain, exercises the final say over a working condition or has the power to override a choice negotiated in a collective-bargaining agreement. See Herbert Harvey, Inc. v. NLRB , 385 F.2d 684, 686 (D.C. Cir. 1967) (discussing such a situation). To address that not-uncommon scenario, the Board has long recognized that two entities may be joint employers in the eyes of the National Labor Relations Act. See, e.g. , Franklin Simon & Co. , 94 N.L.R.B. 576, 579 (1951). This case involves the standard that the Board applies in making that joint-employer determination.

On this point, the National Labor Relations Act gives no direct guidance. The Act provides no relevant definition of "employer," let alone of "joint employer." See 29 U.S.C. § 152(2) (providing only that the term "employer" "includes any person acting as an agent of an employer, directly or indirectly" and excluding listed entities not relevant here).

The Supreme Court, meanwhile, has addressed the question of joint-employer status under the Act only once. In Boire v. Greyhound Corp. , 376 U.S. 473, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964), the Court held that a putative joint employer must "possess[ ] sufficient control over the work of the employees to qualify as a joint employer," id. at 481, 84 S.Ct. 894. That inquiry, the Court stressed, is essentially "factual," and is not controlled by the fact that one putative employer is an independent contractor of another. See id.

In the years that followed, the test that courts and the National Labor Relations

911 F.3d 1201

Board applied to determine joint-employer status resisted consistency or reliable delineation. Compare, e.g. , Springfield Ret. Residence , 235 N.L.R.B. 884, 891 (1978) (finding joint-employer status where employer had the power to hire and fire), with, e.g. , Mobil Oil Corp. , 219 N.L.R.B. 511, 515–516 (1975) (finding joint-employer status where employer had the power to set working conditions and make personnel decisions).

Almost twenty years later, the Third Circuit articulated a standard around which both the Board and courts began to coalesce. In NLRB v. Browning-Ferris Industries of Pennsylvania, Inc. , 691 F.2d 1117 (3d Cir. 1982), the Third Circuit ruled that separate business entities are joint employers if they each "exert significant control over the same employees" in that they "share or co-determine those matters governing essential terms and conditions of employment," id. at 1124 ; see also id. at 1123. The Board soon adopted that same articulation of the test. See TLI, Inc. , 271 N.L.R.B. 798, 798 (1984) ; Laerco Transp. & Warehouse , 269 N.L.R.B. 324, 325 (1984).

This court's test for joint-employer status, like that of a number of other circuits, echoes the Third Circuit's standard, holding that "[t]wo separate entities may be joint employers of ‘a single * * * [work force] if they share or co-determine those matters governing [the] essential terms and conditions of employment,’ " Dunkin' Donuts Mid-Atlantic Distrib. Ctr., Inc. v. NLRB , 363 F.3d 437, 440 (D.C. Cir. 2004) (quoting Aldworth Co. , 338 N.L.R.B. 137, 139 (2002) ). See also 3750 Orange Place Ltd. P'ship v. NLRB , 333 F.3d 646, 660 (6th Cir. 2003) ; Holyoke Visiting Nurses Ass'n v. NLRB , 11 F.3d 302, 306 (1st Cir. 1993).

Following Laerco and TLI ,...