Joint Employment: DOL Issues Adminstrator’s Interpretation

By Martha J. Zackin

The legal concept of joint employment has been around for many years, first gaining national prominence in 1996, after a federal appeals court found Microsoft to be a co-employer of thousands of workers classified either as “contractors” or “temporary employees” retained through a staffing company.  The case, Vizcaino v. Microsoft,, 97 F.3d 1187 (9th Cir. 1996), ultimately settled for $97 million dollars.

In 2015 the National Labor Relations Board weighed in, with Browning-Ferris Industries of California, Inc., 362 NLRB No. 186.  As described in a press release describing the BFI decision, the NLRB will now find two or more entities to be joint employers of a single workforce if “(1) they are both employers within the meaning of the common law;  and (2) they share or codetermine those matters governing the essential terms and conditions of employment.”  In evaluating joint employment status, the NLRB considers whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, such as a staffing company.  Remarkably, with BFI, the NLRB will find joint employment even where a company has not actually exercised control, but has merely “reserved the authority to do so.”


Multiple federal courts also joined the discussion in during 2015, with both the Third and the Fourth Circuit Courts of Appeals finding staffing buyers to be joint employers with the staffing companies whose workers performed the services.   Although the tests applied by the courts were slightly different, the courts in both Butler v. Drive Automotive, 793 F.3d 404 (4th Circuit 2015) and Faush v. Tuesday Morning, Inc., (3rd Circuit 2015) focused on the staffing buyers’ right to control the manner and means by which the work was performed.

Today, the Department of Labor offered its view on joint employment, issuing Administrator’s Interpretation No.  2016-1.  Not surprisingly, the DOL advocates an expansive definition of joint employment “to ensure that workers receive the protections to which they are entitled.”  Within the Administrator’s Interpretation, the DOL introduces the concepts of “horizontal joint employment” and “vertical joint employment.”  According to the DOL, both “horizontal” and “vertical” joint employment exist when “an employee is employed by two (or more) employers and the employers are responsible, both individually and jointly, for that employee under the law.”  With “horizontal” joint employment, an employee may be employed by two companies that share operations.  The “vertical” joint employment relationship is akin to the traditional staffing relationship, where a business obtains workers through an arrangement with an intermediary employee.

With the Administrator’s Interpretation, the DOL also published a blog entry, along with FAQ’s graphic illustrations of “horizontal joint employment” and “vertical joint employment.”

A broad standard of joint employment will have a significant impact on many businesses.   For example, entities deemed to be joint employers may find themselves liable for actions taken by their contractors and suppliers, if those contractors and suppliers are deemed to be joint employers.  Moreover, under the expansive definition described above, non-unionized employers found to be joint employers of unionized entities may find themselves subject to collective bargaining obligations.  Small businesses and franchise owners may be responsible for medical care under the Affordable Care Act, among other laws, if their employees are grouped together and counted with the employees of their co-employers.

Stay tuned for further developments.

NLRB Declines to Assert Jurisdiction Over Religious School

By John F. Welsh

Over the past few years the National Labor Relations Board (“NLRB”) has been re-examining whether it can assert its jurisdiction over religious schools, universities and hospitals.  Recently, Bello Welsh LLP convinced the NLRB’s Division of Advice in Washington, D.C. that the NLRB lacked jurisdiction over our pro bono client, Nativity Preparatory School of Boston. The case is remarkable given that since April 2014, the NLRB has been expanding its jurisdiction inexorably over religious institutions based on its decision in .

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NLRB Strikes Down “Overbroad” Confidentiality Agreement

By Martha J. Zackin

As an employment lawyer, I have had the opportunity to review hundreds of confidentiality and non-disclosure agreements.  Although there are invariably differences from one agreement to the next, virtually all have at least one thing in common- the inclusion of “employee information” within the description of information to be kept confidential.  Such “employee information” typically includes, among other things, salary and pay rates, incentive compensation structures, and disciplinary or investigatory matters.

Over the past few years, the National Labor Relations Board (the Board) has increasingly sought to protect both unionized and non-unionized employees’ rights under Section 7 of the National Labor Relations Act (NLRA), which provides that all employees have the broad right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   For example, the Board has found that Section 7 rights are impinged by policies that require employees to be courteous, refrain from discussing internal investigations, prohibit employees from disparaging or defaming the employer, and prohibit gossip and negativity in the workplace.  (click here for a compilation of NLRB-published information pertaining to social media policies and the use of Facebook and Twitter by employees).

Recently, the Board added standard confidentiality agreements to the growing list of employer policies it has found to violate Section 7, by invalidating a handbook policy that prohibited employees from disclosing or using “for his or her own benefit or the benefit of others, either during or after employment, employer information including “human resources related information” and information pertaining to “investigations by outside agencies.”  This policy, the Board found in Battle’s Transportation, Inc., was overbroad because employees “would reasonably construe those phrases to encompass terms and conditions of employment or to restrict [them] from discussing protected activity, such as Board complaints or investigations.  The Board also found a company directive that prohibited employees from discussing company business with company clients to be unlawfully vague and overbroad, because “employees would reasonably construe this prohibition to restrict discussion about union-related matters.”

Although the Battle’s Transportation workplace is unionized, it is likely that the Board would similarly strike down an “overbroad” confidentiality agreement within a non-unionized workplace.  Although the fight is far from over, it may make good practical sense to review and modify policies now, before the NLRB comes calling.

NLRB Invalidates Overbroad “No Gossip” Policy

Over the past few years, the National Labor Relations Board has expanded its sphere of influence into the non-unionized workplace.  In the guise of preserving workers’ rights under Section 7 of the National Labor Relations Act (which includes the broad right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection), the NLRB has:

  • Invalidated a policy prohibiting employees from making statements that “damage the Company, defame any individual or damage any person’s reputation,” because it  could impede employees’ exercise of their Section 7 rights to protest working conditions (Costco, 358 NLRB No. 106);
  • Found that a company’s blanket policy of requesting participants in an internal investigation to keep the investigation confidential improperly infringes on employees’ Section 7 rights (Banner Health, 358 NLRB No. 93);
  • Weighed in on employers’ social media policies (NLRB reports); and
  • Found a policy requiring employees to be courteous, polite, and friendly to customers to be overbroad and invalid (Karl Knauz Motors, 358 NLRB No. 164).

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New Beginning

I discovered the joys of blogging in 2009, when I helped launch an employment law-related blog at another firm.  I recently joined Bello/Welsh, LLP, a boutique labor and employment law firm, where I am excited to be launching our new blog.

Our primary goal here at WorkLawBlog ( is to educate you about interesting developments in labor and employment law (and our firm).  If we can entertain you along the way, all the better.

On to business… much has happened recently.

  • The Department of Labor issued a final rule extending the Fair Labor Standard Act’s minimum wage and overtime protections to direct care workers who provide home care assistance to elderly people and people with illnesses, injuries or disabilities.   Companionship workers, or individual workers who are employed only by the person receiving services or that person’s family or household and engaged primarily in fellowship and protection and care incidental to such activities, will still be considered exempt from the FLSA’s minimum wage and overtime protections.  You can access the DOL’s press release here.
  • The National Labor Relations Board launched its first mobile app, available free to iPhone and Android users.  According to the NLRB’s press release, the app provides information for employees, unions and employers- whether unionized or not- with information about their rights and obligations under the National Labor Relations Act.  The NLRB joins the DOL’s Wage and Hour Division and the Occupational Safety & Health Administration, both of which have already launched apps.  Click here for the WHD timesheet app and here for OSHA’s heat index for outdoor workers safety app.

And last (for now), but certainly not least…

  •  A NY federal court judge has ruled that Lady Gaga’s former personal assistant is entitled to have a jury decide her claim for unpaid overtime.  According to the former assistant, she was required to be on-call 24/7 and should be paid nearly $400,000 for 7,000 of overtime hours, worked over the course of 13 months.