On August 27, the Board issued a blockbuster decision holding that Browning-Ferris Industries of California was a “joint-employer” of the workers supplied by its temporary staffing agency, Leadpoint Business Service. The Board changed the legal standard for finding “joint-employer” status, holding that “indirect control” by the host employer over the staffing company’s workers will now be considered a main factor in finding joint-employer liability. The Board overruled years of prior cases to reach this extreme result.
When two or more employers are deemed to be “joint-employers” of workers, both become subject to the law protecting the workers, and either or both can be liable for violations. For example, Browning-Ferris may have a legal duty to bargain with the Teamsters’ Union seeking to represent Leadpoint’s employees, and can be sanctioned if it does not.
The Board’s Browning-Ferris decision has sparked the wrath of employers and employers groups across the country. At some point, the Board’s new joint-employer standard will be challenged in court. It also is being scrutinized by some members of Congress. In the meantime, the decision raises a number of troubling questions: If an employer and its staffing company can be “joint-employers,” what about other business relationships, such as: franchisor/franchisee, parent/subsidiaries, or two or more parties to a contract? Does the Board’s new joint-employer test apply to other labor and employment laws such as OSHA?
For now, the new Browning-Ferris test for joint-employer liability only applies to the National Labor Relations Act, not other employment laws including OSHA. Historically, there have been very few OSHA citations issued to host employers and staffing agencies and almost none on a joint-employer theory. Rather, OSHA uses its “Multi-Employer Enforcement Policy” to hold multiple employers liable for the same violation. Under that policy, the “controlling,” “creating,” “exposing,” or “correcting” employers can all be cited for the same violation. Most multi-employer citations are issued to the “controlling employer,” such as a general contractor or facility owner, and the contractors whose employees are exposed.
Recent events indicate that OSHA is more aggressively pursuing “joint-employer” liability. In 2013, OSHA announced a Temporary Worker Initiative, placing a high priority on inspecting employers who use temporary workers. Since then, OSHA has provided guidance that the host employer and staffing agency can divide health and safety obligations such as training. In a July 15, 2014 memo, however, OSHA plainly states that it considers both to be joint-employers of the temporary workers. This means that the host employer, the staffing agency, or both, can be cited for OSHA violations exposing temporary workers. OSHA is now starting to cite both the host employer and its staffing agency for violations.
It also appears that OSHA is pursuing franchisor/franchisee operations, common in many industries such as fast food, as joint-employers. A recent memo from the head attorney of OSHA instructs inspectors to obtain information and documents to determine whether franchisors and franchisees are to be considered joint-employers. The International Franchise Association is seeking an explanation from OSHA.
The imposition of “joint-employer” liability under OSHA can have significant implications for employers. Here are some points to remember:
- Employers using temporary employees can be cited for any violation exposing temporary workers at their work place. OSHA expects temporary workers to be treated the same as the host employer’s regular employees.
- Under OSHA’s recordkeeping rule, only the host employer of temporary workers is responsible for reporting the worker’s injury or illness on its OSHA 300 form, not the staffing agency. In many cases, however, only the staffing agency has information regarding the incident, such as the number of days away from work. The host employer should take steps to assure that the staffing agency provides it with the information necessary to complete its OSHA recordkeeping obligations.
- OSHA’s safety and health requirements, such as training or the provision of PPE, can still be delegated to or assumed by the staffing agency, but remember that the host employer can be cited if the staffing agency fails to perform these responsibilities. Make sure that the staffing agency’s responsibilities are reviewed for sufficiency, set forth in writing and monitored on an on-going basis.
- Carefully review your staffing agency contract to assure that the staffing agency’s duties are specifically defined and the consequences of non-performance, such as indemnification for fines, penalties and attorneys’ fees, are spelled out.
- Franchisees should be alert to any attempt by OSHA – or other government agencies – to establish a joint-employer relationship with its franchisor. Seek counsel.
Rod Smith, Pat Miller, Chuck Newcom and Matt Morrison are part of Sherman & Howard’s Labor & Employment Law Department, practicing in the areas of occupational safety and health law. They routinely appear before the federal Occupational Safety and Health Review Commission, the federal Mine Safety and Health Review Commission, and state occupational safety and health boards.