"The ‘potential control’ and ‘indirect control’ standards announced in BFI are broad enough to cover virtually any business relationship."
WASHINGTON – The National Retail Federation joined with other business organizations in filing an amicus brief with the U.S. Court of Appeals for the D.C. Circuit in the Browning-Ferris Industries’ joint employer case. In an August 2015 ruling against BFI, the National Labor Relations Board significantly broadened the definition of a joint employer.
“The ‘potential control’ and ‘indirect control’ standards announced in BFI are broad enough to cover virtually any business relationship, and the murky guidance provided in the majority opinion makes it virtually impossible for businesses to apply the new standard with any confidence as to whether they are getting it right,” the brief states.
Under guidelines followed for more than 30 years, NLRB held that a company had to have direct control over the actions of a franchisee or subcontractor's employees in order to be considered a joint employer. However, in an August ruling in a case involving the waste management company Browning-Ferris Industries, NLRB said a company could be considered a joint employer even if it had only indirect or unexercised potential control.
Noting that retailers’ business model is dependent on a number of different contractor services, the brief states, “Retailers do not hire, fire or discipline any of the employees of such contractors and lessees. Nonetheless, in order to protect their brand they must have some opportunity to control the quality of the products and services offered by the latter, to ensure that those services are being performed to specifications. This type of interest, together with routine instructions associated with the coordination of these services, should not be cause for concern about joint employer liability.”
NRF joined the Associated Builders and Contractors, Associated General Contractors of America, American Hospital Association, American Hotel and Lodging Association, International Franchise Association and National Association of Home Builders in submitting the brief. It focuses on the practical policy concerns of the construction, health care, retail and hospitality sectors of the U.S. economy and the overall impact on franchising in each of these areas.
About NRF
The National Retail Federation is the world’s largest retail trade association. Based in Washington, D.C., NRF represents discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private-sector employer, supporting one in four U.S. jobs — 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF.com