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Recent Decisions Affecting Worker Rights

Two recent decisions, one by a federal appeals court and the other by the National Labor Relations Board, look to significantly change the landscape of employee rights and constitute the biggest update to labor and employment law in decades.


On August 21, 2015 the Court of Appeals for the District of Columbia overturned a lower court ruling that had struck down labor regulations extending minimum wage and overtime protections to some two million employees who provide home care for the elderly and disabled.  Dating back to 1975 these workers, who mostly provided companionship services, were previously exempt from the minimum wage and overtime protections of the Fair Labor Standards Act.  The industry since then, however, has changed significantly such that many patients now receive professional, not companionship, care at home rather than in an institutional setting.  A new labor regulation issued by the Department of Labor in 2013, and struck down by the lower court, provided that home care workers were entitled to minimum wage and overtime protections.  The Court of Appeals determined that the Department of Labor has the authority over how to define and interpret exemptions under the FLSA as long as its interpretation is reasonable.


Then, on August 27, 2015 the National Labor Relations Board in Browning-Ferris Industriesoverruled a joint-employer standard adopted by the NLRB in 1984.   That standard provided that in order for a company to be considered a joint-employer, that company must have exerted direct and immediate control over working conditions of its contractors or franchisees.  The significance is that parent companies and franchisors were routinely deemed not to be joint-employers for the purpose of collective bargaining, meaning employees could not force them to the bargaining table.  Browning-Ferris Industries, a California company, had hired a contractor to staff and operate its facility, and employees of the contractor attempted to bring Browning-Ferris Industries to the negotiating table.  The NLRB found that even though Browning-Ferris did not exercise direct and immediate control of the employees, it reserved the right to terminate them, set limits on what they could be paid, and defined the lengths of their shifts, among other things, sufficient to establish a joint-employer relationship.  Changing the standard, according to the NLRB, will encourage the practice and procedure of collective bargaining.  This ruling is likely to have an impact on the NLRB’s consideration of a pending case against McDonalds and several of its franchisees, which in turn could affect many other franchise arrangements.  Proponents of the change have maintained that increases in franchising and the use of contractors has taken away the rights of millions of employees to have input on their working conditions.