1. GREENBERG TRAURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM ©2015 Greenberg Traurig, LLP. All rights reserved. The National Labor Relations Board (“NLRB”) – Expanding the Joint Employer Standard Presented by: Todd D. Wozniak, Esq. Ian Macdonald, Esq. Jonathan M. Young, Esq. Todd D. Wozniak| wozniakt@gtlaw.com | 678-553-7326 Ian Macdonald | macdonaldi@gtlaw.com | 678-553-2467 Jonathan M. Young| youngjon@gtlaw.com | 678-553-2675

2. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com AGENDA > Browning Ferris Industries (“BFI”) Overview > Former Joint Employer Standard > BFI – Factual Findings by Regional Director > BFI – Decision by NLRB > BFI’s Impact on Existing Labor Law > Other Employment Law Changes – FLSA > Economic Realities Test > Other Employment Law Changes – Affordable Care Act (“ACA”) > Poll Questions > Practical Recommendations > Industries/Companies Of Concern 2

3. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com NLRB - Expansion of Joint Employer Standard > Browning Ferris Industries (“BFI”) –3-2 decision; previous joint employer standard no longer applies to current workplace circumstances –BFI, owner/operator of a recycling facility, held to be joint employer with temp. agency that supplied workers to facility 3

4. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Former Joint Employer Standard > Control Test: “whether alleged joint employers share the ability to control or co-determine essential terms and conditions of employment” including: –Hiring –Firing –Discipline –Supervision. 1 > Additional decisions placed increasing emphasis on the type of control exercised, requiring control to be “direct and immediate.” 2 4 1)See TLI, Inc., 271 LRB 798, 799 (1984) 2)See, e.g., in re Airborne Freight Co., 338 NLRB 597 (2002)

5. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com BFI – Factual Findings by Regional Director > Written agreement between BFI and temp. agency provides the agency is “the sole employer of the Personnel” and “shall not be construed as creating an employment relationship” between BFI and temp. workers > Temp. agency handled disciplinary concerns and training, set workers’ schedules, and dealt with all HR needs > Temp. agency set its employees’ wages, paid them, provided insurance, and handled all requests for time off > Temp. agency invoiced BFI for services, detailing the number of employees, the hours they worked, and their rates 5

6. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com BFI – Decision by NLRB > Two or more entities are employers of a single workforce if they: –share or codetermine those matters governing the essential terms and conditions of employment; and –are both employers within the meaning of common law. > If these factors are met, inquiry turns to whether an employer possesses “sufficient control” over employees to qualify as a joint employer including whether: –an employer has exercised control over terms and conditions of employment directly or through an intermediary; or –it has reserved the authority to do so. 6

7. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com BFI ’s Impact on Existing Labor Law > Other statutes that use the common law test to determine joint employer status: –the Fair Labor Standards Act (“FLSA”); –the Family and Medical Leave Act (“FMLA”); –Title VII of the Civil Rights Act (“Title VII”); –the Age Discrimination in Employment Act (“ADEA”); and –various statutes. > If courts begin adopting the NLRB’s joint employer test in BFI, employers could face expanded coverage and/or joint and several liability under any or all of these statutes 7

8. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com BFI ’s Impact on Immigration Law > Definitions of employee and employer in immigration law are circular –Employee: “An individual who provides services or labor for wages or other remuneration.” 8 CFR §274a.1(f) –Employer: “An agent or anyone acting directly or indirectly in the interest of the person/entity who engages the services/labor of an employee for wages or other remuneration.” 8 CFR §274a.1(g) > Courts have historically looked to common law control test to determine if an individual is an “employee” of an “employer” 8

9. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com BFI ’s Impact on Immigration Law > Expanded definition of “co-employer” would trigger potential liability for immigration violations by and for “co-employees” –Failure to properly complete a required I-9 for co- employee –Knowingly engaging the services/labor of co-employee who lacks work authorization –Discrimination in hiring and/or document abuse by co- employer > Possible contractual protections –Expanded indemnification clauses among co-employers –Require all co-employers to be enrolled in E-Verify 9

10. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Other Employment Law Changes - FLSA > On July 15, 2015, the U.S. Dept. of Labor (“DOL”) issued administrative guidance regarding the FLSA with respect to the misclassification of workers as independent contractors (“ICs”) –In the DOL’s opinion, “most workers are employees” under the FLSA –DOL has fully embraced the “economic realities test” and downplayed the significance of an employer’s exertion of control over worker’s tasks 10

11. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Economic Realities Test: Factors Considered > The extent to which the work performed is an integral part of the employer’s business; > The worker’s opportunity for profit or loss depending on his or her managerial skill; > The extent of the relative investments of the employer and the worker; > Whether the work performed requires special skills and initiative; > The permanency of the relationship; and > The degree of control exercised or retained by the employer 11

12. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Other Employment Law Changes – Affordable Care Act (“ACA”) > The ACA allows parties to allocate responsibility to provide minimum essential coverage to all full-time employees (and their dependents) determined by common law, subject to minimum value and affordability requirements > Failure to provide coverage can result in an assessable penalty > Issues: –IRS reporting requirements for staffing agency or company? –Indemnity for bankrupt joint employers? –Hidden employees who are full-time but work across various employers? 12

13. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Poll Question #1 > True or False: Federal agencies like the NLRB and DOL alter their rules depending on the President’s attitudes. 13

14. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Trend in United States Labor & Employment Law > NLRB ruling in Browning-Ferris and DOL guidance concerning ICs represent aggressive efforts by the federal government to ensure employers are paying for employee benefits > Expect these shifts to impact other laws concerning: –Taxes (withholding and benefits); –unfair labor practices; –collective-bargaining/unionization; and –economic protest activity. 14

15. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Poll Question #2 > True or False: Failing to properly classify employees only exposes an employer to back wage and benefit payments. 15

16. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Misclassification Liability > Includes back payment of unpaid: –income tax withholdings; –unemployment insurance taxes; –workers’ compensation premiums; –overtime compensation and/or minimum wages; –work-related expenses; –sick and vacation pay; –ERISA benefits, and medical coverage under the Affordable Care Act; and, –interest, penalties, and/or attorneys’ fees 16

17. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Practical Recommendations > Practical recommendations –Consider liability in choosing whether to delegate hiring and operations to a staffing company; either you or staffing company should have clear responsibility for compliance –Diagnose whether employees are properly classified through a compliance analysis (agreements, operating documents, employee interviews, etc) –Re-document/restructure ICs as employees if needed –Consider government or voluntary reclassification as an alternative to compulsory reclassification 17

18. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com Industries/Companies Of Concern > Franchisors –Franchisors have historically found not to be joint employers of their franchisees’ employees –But in Spring 2015, McDonalds was held by NLRB to be joint employer with certain franchisees  McDonalds sets broad standards that range from speed limits in drive-thrus and bag-folding techniques to patterns in workers’ wages and benefits > Companies that use staffing solutions –NLRB ruling in Browning-Ferris indicates that many companies that use staffing solutions could be joint employers 18

19. NLRB Expansion of Joint Employer Standard Greenberg Traurig, LLP | gtlaw.com 19