On heels of NLRB, OSHA looks to expand joint-employer liability

In late August, the NLRB issued its landmark Browning-Ferris decision, which expanded the scope of joint-employer liability to include not only those entities that exert actual control over the employees of another related, but independent entity, but also those that exert indirect or potential control.

Now, it appears that OSHA seeks to follow suit.

In a draft, internal memo [pdf] obtained and published by InsideOSHAOnline, OSHA opined that it will also look to expand joint-employer coverage and hold a wide scope of businesses liable for workplace safety violations.

Ultimate determination will be reached based on factual information about the relationship between the franchisor and franchisee over the terms and conditions of employment. While the franchisor and the franchisee may appear to be separate and independent employers, a joint employer standard may apply where the corporate entity exercises direct or indirect control over working conditions, has the unexercised potential to control working conditions or based on the economic realities. As a general matter, two entities will be determined to be joint employers when they share or codetermine those matters governing the essential terms and conditions of employment and the putative joint employer meaningfully affects the matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.

Thus, like the NLRB, OSHA will determine whether two entities are “joint employers” based not only actual, direct control, but also on “indirect control over working conditions, has the unexercised potential to control working.”

What does this mean? It means that franchisors, general contractors, subsidiaries, and the end-users of staffing-agency employees all must consider whether they are on the hook for the safety violations of those in which they are engaged in arms-length business transactions. More importantly, they will likely act as guarantors for the safety of employees they have not hired, cannot fire, do not discipline, and will never supervise or direct.

This joint-employment issue is the single most important issue facing employers in 2015 and beyond. If you are engaged in a franchise or other business relationship in which the other party employees individuals to perform work, it is imperative that you review your agreements to ensure that you are protected going forward from the possibility (probability?) that you are a joint employer. From an OSHA perspective, this means ensuring that representations and warranties are in place that cover OSHA compliance, and appropriate indemnity is provided in the event of OSHA violations.