NLRB joint employer decision marks trend to extend liability

NLRB joint employer decision marks trend to extend liability

A recent decision by the National Labor Relations Board (NLRB) is noteworthy for dealers both in their relationship with their franchisor and as the hiring entity for contractors such as F&I service companies.

The NLRB ruled that a California-based recycling facility is a –joint employer” for collective bargaining negotiations with employees of a temporary staffing company. The term now applies if the company has the right of –actual control, whether direct or indirect.” This latest decision, coupled with an NLRB memo on McDonaldês franchisees in July, –points to a trend in the NLRB to extend liability under the National Labor Relations Act to companies not previously considered to be employers,” said Michael Charapp, auto dealer lawyer with Charapp & Weiss and a WANADA Kindred-line member. The following is from Charappês analysis:

Manufacturer incentive plans. Incentives plans announced by manufacturers sometimes provide specific standards for dealership employee appearance, activities or performance. Sometimes manufacturers create performance plans for dealership employees and pay them directly. The more manufacturers try to impose controls that affect dealer employees, the more likely they can be held jointly liable for violations of the National Labor Relations Act. It may be useful to remind the factory of this in any discussions about increasing efforts to control dealer practices.

Manufacturer-supplied marketing personnel. Somtimes a manufacturer will provide temporary marketing personnel to a dealership. To the extent the dealer and the manufacturer have the right of control over the activities of the workers, the manufacturer, the dealer and any staffing company involved could all be joint employers under the National Labor Relations Act.

Dealers hiring contractors. Dealers sometimes contract with F&I service companies to provide specialists to close deals and sell finance and insurance. To the extent the dealer may oversee and control the workerês activities and performance, this increases the possibility that the dealer can be held liable under the National Labor Relations Act with the F&I service company.

The NLRBês recent decisions indicate that it will broaden its interpretation of the law to become involved and protect concerted action by personnel, regardless of whether they are considered employees under state law.