NLRB Aug/2015 Decision: All you need to know

labor unionsThe National Labor Relations Board (NLRB) rarely issues closely determined decisions. Still, on August 27, 2015, the NLRB announced its 3-2 decision on Browning Ferris Industries of California, essentially making it easier for franchisee employees and contract workers to unionize.

This decision effectively revised the Board’s long-held position on joint employer situations. “The Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances” (NLRB). The NLRB never does anything finally or unambiguously. But, you can work with your PEO to strengthen your organization’s position following the NLRB joint employer decision.

The decision details

The NLRB determination finds that two or more employing entities are “joint” if -

  1. They are both employers within the meaning of the common law.
  2. They share or codetermine those matters governing the essential terms and conditions of employment.

What’s new is the Board, in evaluating the employer’s control, will  “consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so” (NLRB).


NAPEO position

The National Association of Professional Employer Organizations (NAPEO) officially takes a union-neutral position.

PEOs work equally well in union and non-union worksites. The National Labor Relations Board (NLRB) recognizes that in co-employment relationships, worksite employees are appropriately included in the client employer's collective bargaining unit. Where a collective bargaining agreement exists, PEOs fully abide by the agreement's terms. PEOs endorse the rights of employees to organize, or not organize, under state and federal laws (NAPEO).

Despite the NAPEO’s take, the NLRB decision introduced the concept of “reserved authority.” According to Forbes’s Daniel Fisher, “This identifies the employer as the entity with potential to control wages, discipline and working condition, all typical grist for union negotiations.”

Implications for joint employment

This broader definition appears to makes issues of “control” a largely irrelevant concept or protection shadowed by the “potential to control.” Writing for SHRM, Allen Smith says, “By redefining what it means to be an employer, the board has set a dangerous precedent that will lead to higher costs for consumers and fewer jobs for workers.”

  • NLRB’s interpretation of “reserved authority” says that the employer in control of the terms and conditions of employment – even if the control is not exercised – may determine whether or not there is joint employment.
  • The primary employer does not have to exercise direct or immediate control to be considered a joint employer.
  • Even a formal agreement affirming the secondary employer as the sole employer of contingent workers does not determine the joint employer relationship.
  • Distinct and separate lines of management and Human Resources functions do not differentiate joint employers.

Implications for your PEO relationship

Professional Employer Organizations have not claimed to be immune from unionization. It provides no absolute barrier to union incursion at your organization. But, there are some more positive implications:

  • The NLRB decision was rendered against a large employer that utilized temp employees. The decision ruled against the primary employer not the temp provider. That may reflect the desire to move against the entity with “deep pockets” and an infrastructure with long-term potential for the union. Employers with small to mid-size workforces do not seem so vulnerable.
  • The decision is more of an immediate threat to employers in franchise arrangements. McDonald’s, for example, can no longer seek protection from union movements by distributing employees through franchise arrangements. These are not co-employment arrangements as understood by the PEO concept.

What to do?

Partly dependent on your industry sector and position, partly on your size and location, you want to begin discussions with your PEO to confirm that you are both on the same page with regard to your union interests.
It is illegal to conspire against employee rights to unionize. However, private business still retains rights to protect its own interests. So, to the extent that preventive measures are legal and doable, to the extent that all stakeholders in both parties to the agreement are trained in best practices, and to the extent that all processes and communications are in compliance, you need to work with your PEO to strengthen your organization’s position following the NLRB joint employer decision.


Board issues decision in Browning-Ferris Industries. (2015, August 27). Retrieved August 30, 2015, from National Labor Relations Board:

Fisher, D. (2015, August 27). Controversy NLRB ruling could end contract employment as we know it. Retrieved August 30, 2015, from Forbes:

peoindustry/faq. (n.d.). Retrieved from NAPEO:

Union organization eased under NLRB's broader definistion of 'Joint Employer'. (2015, August 28). Retrieved August 30, 2015, from SHRM:


For legal counsel surrounding this issue in FL, we recommend Amy E. Stoll, Esq., Partner at Older, Lundy, Koch & Martino, Attorneys at Law. We know the firm’s attorneys are dedicated to providing thorough and accurate legal representation to their clients.