UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD

Transcription

1 UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD GREEN JOBWORKS, LLC/ ) ACECO, LLC, ) ) Employers ) ) Case No. 05-RC and ) ) Construction & Master Laborers Local ) Union No. 11, ) ) Petitioner ) ) ACECO, LLC S BRIEF TO THE BOARD ON REVIEW MAURICE BASKIN LITTLER MENDELSON, P.C. 815 Connecticut Ave., N.W. Suite 400 Washington, DC March 22, 2016 Counsel for ACECO, LLC

2 Introduction ACECO, LLC ( ACECO ) hereby submits its Brief to the Board on Review, pursuant to Section (h) of the Board s rules. For the reasons fully detailed in ACECO s Opposition to Petitioner s Request for Review, hereby incorporated by reference, the Board should affirm the Regional Director s Decision dated October 21, 2015, holding that ACECO is not a joint employer with Green JobWorks, LLC ( GJW ) of the employees in the petitioned-for unit. As further set forth below, the Regional Director properly applied all of the criteria set forth in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015) (hereafter BFI ), and properly concluded that the facts of this case are significantly different from the facts of BFI. In the alternative, and without waiving any of the foregoing defenses, ACECO submits that to the extent BFI is found to justify a joint employer finding in this fundamentally different construction industry context, then BFI must itself be overruled as improperly decided. Finally, if the Board chooses to apply BFI to this case by improperly declaring ACECO and GJW to be joint employers, then the Board is required to set aside the Regional Director s certification of the results of the election and conduct a new election that correctly identifies the employer(s). 1. The Board Should Affirm The Regional Director s Finding That ACECO Is Not A Joint Employer Under The BFI Test. Having granted review, the Board should take this opportunity to provide greater guidance to the myriad employers, unions, and employees subject to the Board s jurisdiction, as to the boundaries delimiting the new BFI standard. As the Board is aware, the dissenting opinion in BFI asserted that the new standard adopted by the Board fundamentally alter[ed] the law applicable to virtually every business-to-business 1

3 relationship, and was near limitless in nature. Id., slip op. at 23, 36. The Board majority said that the dissenting opinion was simply wrong in its assertion. Id., slip op. at 20, n.120. If so, then the Board should refute the dissenters claim by affirming the Regional Director s Decision here and by finding that the BFI standard does not impose joint employer status on ACECO and GJW. It remains undisputed in the present case that the relationship between ACECO and GJW is that of contractor-subcontractor in the construction industry, not that of premises owner and labor supplier in the manufacturing sector, and that ACECO does not share or co-determine the essential employment conditions of the employees in the petitioned-for unit. NLRB v. Browning-Ferris Indus., 691 F.2d 1117, 1123 (3d Cir. 1982) (the standard to which the new BFI decision purports to adhere). In the present case, the Petitioner presented virtually no evidence of ACECO s supervision of GJW employees, and the parties contractually agreed that GJW would provide site supervision expressly for the purpose of avoiding joint employer responsibility on the part of ACECO. (ACECO Ex. 2). The unrefuted testimony in the record further established that GJW s employees arrived at ACECO s job sites fully trained by GJW and fully understanding their job duties. (Tr , , 170, ). In addition, the work schedule, hours of work, and break periods were set by GJW, within parameters fixed by ACECO s general contractors, not by ACECO. (Tr. 170). Finally, ACECO plays no role in the wage setting, hiring, discipline, or termination of GJW employees. (Tr , 81-83, , 122, , , ). By contrast with the present case, the Board described the actual facts in BFI, to which its new standard applied, as follows: Where the user firm owns and controls the 2

4 premises, dictates the essential nature of the job, and imposes the broad, operational contours of the work.... Id. at 14. The Board further observed that the BFI case closely resembles the situation addressed in Restatement (Second) Sec. 220, comment l, which explains that where work is done upon the premises of the employer with his machinery by workmen who agree to obey general rules for the regulation of the conduct of employees, the inference is strong that such workmen are the servants of the owner. Id. at 18 n The Board further explained in BFI that mere service under an agreement to accomplish results or to use care and skill in accomplishing results is not evidence of an employment, or joint-employment relationship. Id. at 12, quoting the Restatement (second) of Agency 220. Finally, the BFI Board held: We do not suggest today that a putative employer s bare rights to dictate the results of a contracted service or to control or protect its own property constitute probative indicia of employer status. Id. at 16. nstead, the new BFI standard, in the Board s words, addresses only an entity s control over terms of employment, not the wider universe of all underlying economic facts that surround an employment relationship. Id. at 17. In the present case, the Regional Director properly found that ACECO does not exercise any meaningful control over the terms of employment of GJW s employees, that the facts here are substantially different from BFI, and that the Petitioner failed to meet 1 The Board further summarized the record of the BFI case as showing that BFI engages in de facto close supervision of the work of Leadpoint employees; that the work of Leadpoint employees does not require the services of one highly educated or skilled; that Leadpoint employees have employment over a considerable period of time with regular hours; and that the work of Leadpoint employees is part of the regular business of BFI. Quoting Restatement (Second) 220(l). 3

5 its burden of proving joint employer status. 2 RD Dec. at 9. The facts in the record before the Regional Director amply support his decision on this issue. Thus, unlike BFI, ACECO is not the owner of any of the multiple premises where the petitioned-for GJW employees are working, and ACECO is not even the prime (general) contractor on any of these projects. ACECO is itself a subcontractor to various prime contractors such as Grunley Construction on each of the projects at issue. This is a highly significant difference from the Board s holding in BFI, because only a jobsite owner and/or prime contractor on a construction jobsite, not any mere subcontractor, can in most instances control the workplace. As the record shows in this case, ACECO does not set the work hours for GJW employees; rather the work hours and break times are set by Grunley and/or other prime contractors on each job. (Tr , 170). By contrast in BFI, the Board found that BFI as premises owner set the work hours for Leadpoint s employees. In addition, unlike BFI, ACECO does not meaningfully control the working conditions on any jobsite where GJW employees are working, including with regard to such important workplace conditions as safety standards and jobsite access. Such conditions are all established and enforced by GJW within parameters set by the general contractor and/or the owner, not by ACECO. (Tr. 162, , ). Another fundamental difference between the present facts and BFI is the absence of any evidence of meaningful supervision by ACECO over the performance of work by GJW employees. In BFI, the Board expressly relied on the fact that BFI management regularly interacted with Leadpoint s workers before their daily breaks; that BFI supervisors called group meetings with the suppliers workers to discuss productivity 2 The present case is also substantially different from the case of Retro, Inc., No. 5-RC , decided by the Regional Director before BFI was issued, and in which the Board recently granted the same Petitioner s Request for Review. 4

6 issues; that BFI set productivity standards and required drug tests of Leadpoint employees; and that BFI managers imposed requirements on Leadpoint s employees over how they should leave their work areas. In the present case, on the other hand, there is no record evidence of ACECO management engaging in any comparable supervision of GJW employees. Indeed, the absence of ACECO supervision is expressly codified in the renegotiation of the subcontract between the two companies in April-May of 2015, which expressly states that GJW leadmen and supervisors would exercise all supervisory responsibilities over GJW employees. (ACECO Ex. 1). 3 The Petitioner s failure to meet its burden of proving supervisory authority by ACECO remains just as significant after BFI, if not more so. It is also significant that GJW s asbestos workers are skilled workers who are certified as having been trained to perform asbestos remediation prior to assignment by GJW to any ACECO jobsite. (Tr , 120). By contrast, the sorting line workers supplied by Leadpoint to BFI were unskilled and uneducated, an important factor in finding joint employer status, according to the Board and the Restatement. (BFI at 18, n.96). Another dramatic difference between the present facts and BFI relates to the hiring process. Whereas BFI s agreement with Leadpoint outlined numerous hiring standards imposed by BFI, on which the Board expressly relied in making its joint employer finding (BFI slip op. at 18), ACECO s agreement with GJW imposes no comparable hiring standards. (AECO Ex. 2, 3; Tr , 81-83, 119, ). Among other differences, BFI did not allow Leadpoint to hire anyone to work on BFI s premises who had previously worked for BFI and had been declared ineligible for rehire. (BFI at 3 See also GJW Ex. 2 and 3; Tr , 162, 181, , , 213, ,

7 18). ACECO s agreement contains no such prohibition. Also, BFI s agreement requires drug testing of Leadpoint s employees (Id.), while ACECO imposes no such requirement. 4 Also different is the level of authority over the removal of employees from the jobsite(s). BFI s agreement maintained total control over the right to remove any Leadpoint employee from the project for any or no reason. (BFI at 18). By contrast, ACECO s right of removal by contract is limited only to safety issues or reasonable objections which must be explicitly stated. (ACECO Ex. 1 Par. 6, Ex. 2 A, Par. 6). ACECO is further circumscribed in its removal authority by the control exercised by the General Contractor and the owner of each jobsite who actually directs such removals of GJW employees. (Tr. 162, , 176-7). Of great significance also to the issue of joint collective bargaining is that the BFI agreement expressly limited the pay rates for Leadpoint employees so that they could not be higher than the wages paid to BFI employees. (BFI at 19). To the contrary, there are no wage limitations of any kind in the ACECO agreement with GJW. (ACECO Ex. 2). Other important differences between BFI and the present facts are that BFI managers directly counseled Leadpoint employees for workplace performance problems. (BFI at 18). ACECO plays no role in counseling or otherwise disciplining GJW employees. (Tr , 209). BFI also provided safety training for Leadpoint employees. (Id.) ACECO does not provide any such training to GJW employees. (Tr ). BFI required Leadpoint to test its employees to determine that they met BFI s 4 The present case is also different from BFI because most of the GJW workers perform work on multiple jobsites where ACECO is not even present, and their work on ACECO jobsites is usually of short duration. (Tr , 201, 139; Pet. Ex. 3). 75 percent of GJW employees who have worked at ACECO projects during the relevant time period have also worked for non-aceco clients of GJW. (GJW Ex. 5). 6

8 standard employee productivity benchmarks. (BFI at 18, n.98). ACECO does not impose any remotely similar requirement on GJW. BFI also required Leadpoint employees to sign a written acknowledgement of compliance with ACECO s work rules. But the record is clear in the present case that GJW employees are covered only by GJW s work rules, not ACECO s. (GJW Ex. 1; Tr. 172, 180). Finally, unlike either BFI or Retro, ACECO entered into a Subcontract Addendum and a Master Labor Services Agreement contract with GJW on respectively, April 22, 2015 and May 8, 2015, with the deliberate intention of establishing beyond doubt that the two entities would NOT be joint employers. (Tr , , 177, ). The Board s BFI decision reaffirmed adherence to the Restatement s statement that whether or not the parties believe they are creating the relation of master and servant as expressed in such an agreement, is a significant factor in disproving joint employer status. It is also significant that ACECO s agreement(s) with GJW are not terminable at will, as was true of the agreement between BFI and Leadpoint. (BFI at 18; compare ACECO Ex. 2, Par. 11). Since the Board found the at-will provision of BFI s agreement to be an important factor showing joint employer status, it must certainly be the case that the default-only termination provisions of ACECO s agreement(s) with GJW is an equally important factor in finding no joint employer status. As has also been previously noted, the Subcontract Addendum calls for GJW, not ACECO, to provide supervisory personnel to direct GJW employees at ACECO s jobsites, document and track their hours, determine their breaks and rest periods, evaluate their performance, and remove them from the project if necessary. (Id.; Tr ). 7

9 Subsection 2 of the Subcontract Addendum states that ACECO will direct only GJW s supervisory personnel (as opposed to directing GJW s employees), and only then within the scope of work commitments to the jobsite Owner and General Contractor. (ACECO Ex. 1). The Master Labor Services Agreement, which ACECO and GJW renegotiated on May 8, 2015, further reinforced GJW s exclusive responsibilities as to its own employees, including the following: a) Recruiting, hiring, assigning, orienting, reassigning, counseling, disciplining, and discharging the Leased Employees b) Making legally-required employment law disclosures (wage hour posters, etc.) to them c) Establishing, calculating, and paying their wages and overtime d) Exercising human resources supervision of them e) Withholding, remitting, and reporting on their payroll taxes and charges for programs that GJLLC is legislatively required to provide (including workers compensation) f) Maintaining personnel and payroll records for them g) Obtaining and administering I-9 documentation of Leased Employees right to work in the United States h) Paying Leased Employees wages and providing the benefits that GJLLC offers to them i) Paying or withholding all required payroll taxes, contributions, and insurance premiums for programs that GJLLC is legislatively mandated to provide to Leased Employees as GJLLC s employees j) Providing workers compensation benefits or coverage for Leased Employees in amounts at least equal to what is required by law k) Fulfilling the employer s obligations for unemployment compensation l) Complying with employment laws, as they apply to GJLLC. (ACECO Ex. 2, p. 5) The Master Labor Services Agreement between ACECO and GJW contains additional provisions further demonstrating the parties mutual intent that ACECO not 8

10 exercise control over the terms and conditions of employment of GJW s employees. See ACECO Ex. 2, Sections 1, 6, 9, and 14; and Exhibits A-D. The foregoing provisions clearly vest greater control in GJW as opposed to ACECO than was present in the agreement between Leadpoint and BFI, and for that matter the agreement between GJW and Retro in Case No. 5-RC Indeed, the relationship between ACECO and GJW in the present case exemplifies mere service under an agreement to accomplish results or to use care and skill in accomplishing results which the Board declared in BFI is not evidence of an employment, or jointemployment relationship. Id. at 12. Ignoring virtually all of the foregoing factual differences between the present case and BFI, the Petitioner s Request for Review heavily relied on certain cherry picked text messages between ACECO and GJW managers, which the Regional Director properly discounted as showing inadequate evidence of control by ACECO over any of GJW s working conditions. 5 In particular, the Regional Director found, and the Union has not denied, that it was the General Contractor, who the Petition does not claim is a joint employer, who exercised control over the working conditions on their jobsites, not ACECO. It is thus clear from all of the above factual differences between the present case and BFI that ACECO is not a common law employer or joint employer of GJW s employees, and the Regional Director properly so held. In addition, unlike the union in BFI, the Petitioner has failed to meet its burden of showing that ACECO has sufficient control over GJW employees to allow the Company to engage in meaningful collective 5 The Petitioner inaccurately characterizes these text messages as frequent when in reality the messages relied on by the Union constituted a tiny percentage of the correspondence described in the record. (Tr , making clear that only a handful of messages mentioned any GJW employees by name. 9

11 bargaining. This is a separately required finding as to which no evidence exists in the record, or alternatively, that is refuted by the evidence that does exist. 6 Thus, ACECO s control over the terms or conditions of employment of GJW employees is too limited in scope or significance to permit meaningful collective bargaining. Indeed, ACECO is at a loss to know what it would be called upon to do at the bargaining table, given its lack of knowledge about or control over GJW employees. Contrary to the Petitioner s claims, the evidence discussed establishes that every significant term of employment is controlled either by GJW or by the general contractor or owner of each project on which ACECO performs work as a subcontractor In The Alternative, BFI Should Not Be Applied To This Case Because BFI Was Wrongly Decided And Should Be Overruled. If the Board chooses to overturn the Regional Director s Decision and declare that the new BFI standard dictates a joint employer finding here, then the Board will be proving correct the BFI dissenters warning that the new standard is unlimited in its scope and fundamentally alters the law in a host of legal relationships between different entities. The Board will also give credence to the widespread criticism of the seemingly open-ended BFI standard that has been expressed in Congress, 8 in the media, 9 and 6 BFI at 13, n.68: [W]e will not find joint-employer status where a putative joint employer despite the existence of a common-law employment relationship could not engage in meaningful collective bargaining. 7 By contrast, the Board in BFI found that BFI had ultimate control over the following bargainable issues: break times, safety, the speed of work, and the need for overtime imposed by BFI s productivity standards. (BFI at 19). The record is clear in the present case that ACECO does not have control over any of these issues. 8 Sen. Lamar Alexander and Cong. John Kline, Small Business Owners Support Legislation to Roll Back Labor Decision. (Sept. 22, 2015) ( The NLRB s new joint employer standard would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses. 9 Wall Street Journal, NLRB s Joint Employer Attack (Aug. 28, 2015). 10

12 throughout the business community. 10 As noted above, the present case involves a contractor-subcontractor relationship in the construction industry, far different from the landfill operation at issue in BFI. ACECO exercised neither direct nor indirect control over GJW s employees on its demolition projects. If the BFI standard is deemed to compel a joint employer finding here, then no business can safely interact with any other business without fear of an unanticipated joint employer finding, and no steps can be taken to guard against such an unwanted result. In that event, BFI itself must be deemed to be wrongly decided and should be overruled in whole or in part, for the reasons identified in the dissenting opinion. ACECO certainly agrees with the BFI dissenters that the new standard announced in that case, absent any apparent boundaries, exceeds the Board s statutory authority by incorporating theories of economic realities that extend the definitions of employee and employer beyond the common law limits of agency principles intended by Congress and reaffirmed by the Supreme Court. 362 NLRB No. 186 (slip op.) at 21. The BFI holding is also mistaken in its characterization of third-party relationships as somehow unique to the modern economy. Of particular relevance to the present case are such Supreme Court decisions as NLRB v. Denver Building Trades Council, 341 U.S. 675, 692 (1951), which recognized the right of construction contractors to subcontract work without being considered to be employers of their subcontractors employees. See also Fibreboard Corp. v. NLRB, 379 U.S. 203 (1964). The Board s BFI test also exceeds the Board s statutory authority by modifying the common law agency test to allow evidence of indirect and potential control to substitute for the previously required proof 10 Hogan, The NLRB Joint Employer Cases: An Attack On American Business (Competitive Enterprise Institute 2015), 11

13 of direct control by the alleged joint employer. NLRB v. United Insurance Co. of America, 390 U.S. 254, 256 (1968). If BFI s application results in a joint employer finding in this case, then the BFI dissenters were also correct in their assessment that the new standard removes all predictability from the decision making process, making it impossible for employers to know for certain that they are not joint employers. This unpredictability is certainly evidenced by the facts here, where ACECO and GJW entered into an amended agreement whose express purpose was to establish separation of their responsibilities so as to avoid any hint of joint employer status. Significantly, the Regional Director found the contract language and day-to-day practices of the employers here precluded any joint employer finding. Yet now the parties status is once again being called into question by the Board s grant of the Union s Request for Review. It is also beyond the Board s statutory authority to apply the joint employer standard for the purpose of correcting perceived inequalities in bargaining relationships, as is evidently the purpose underlying the new BFI standard. See 362 NLRB No. 186 (slip op.) at 23. The result of imposing a joint employer finding here will be to force nonconsenting parties, with diverse and conflicting interests, into joint bargaining over matters that they do not control. For each of these reasons, as more fully detailed in the lengthy dissenting opinion in BFI, rather than mistakenly applying the new BFI standard to find joint employer status in this entirely different case, the Board should return to the standards articulated in TLI, Inc., 271 NLRB 798 (1984), enf d 772 F.2d 894 (3d Cir. 1985), and Laerco Transportation, 269 NLRB 324 (1984), each of which adopted the Third Circuit s joint 12

14 employer standard announced in NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117, 1124 (3d Cir. 1982). See also G. Wes Ltd. Co., 309 NLRB 225, 226 (1992) (a case which likewise involved asbestos abatement employees); AM Property Holding Corp., 350 NLRB 998, 1001 (2007); Flagstaff Medical Center, Inc., 357 NLRB No. 65 (Aug. 26, 2011); Hychem Constructors, Inc., 169 NLRB 274, 276 (1968). Under these previously well settled precedents, it is clear that ACECO and GJW are not joint employers. 3. If The Board Does Find ACECO And GJW To Be Joint Employers, Then The Certification Of The Results Of The Election Must Be Set Aside And A New Election Must Be Held That Correctly Identifies The Employer(s) Of The Bargaining Unit. Under the new election rules effective April 14, 2015, after making his ruling that ACECO and GJW were not joint employers, the Regional Director proceeded to conduct and certify the results of the election. The Notice of Election and all ballot information indicated to the voting employees that their employer was GJW, not ACECO, and there was no indication to the employees that they were voting to bargain with any joint employer consisting of both GJW and ACECO. This information was clearly erroneous if the Board now finds (incorrectly) that ACECO and GJW were joint employers when the election was scheduled and held. At a minimum, a question of representation is raised as to whom the employees believed they worked for at the time of the vote. Therefore, if the Board reverses the Regional Director s joint employer finding, the election must likewise be set aside. See NLRB v. Western Temporary Services, 821 F.2d 1258 (7th Cir. 1987) (petition that named only one of two employers subsequently found 13

15 to be joint employers held insufficient, absent waiver). 11 It is of course unnecessary to reach this issue if the Board correctly affirms the Regional Director s Decision and the Certification of election stands, with no joint employer finding. Respectfully submitted, /s/ Maurice Baskin Maurice Baskin Littler Mendelson, P.C. 815 Connecticut Ave, N.W. Suite 400 Washington, DC mbaskin@littler.com Date: March 22, 2016 Attorney for ACECO, LLC 11 In BFI itself, the ballots were impounded under the old election rules, and no final certification issued until the joint employer status of the employers was finally determined by the Board. 362 NLRB No In any event it is unclear from the public record in that case whether any party called for the election results to be set aside after the Board made its joint employer finding. In the present case, however, ACECO does object to any imposition of a bargaining duty upon it based on a post-election joint employer finding, where the employees were misled by the Board s own agents into voting under the belief that their only employer was GJW. If the Board now declares for the first time that ACECO is a joint employer of the employees in the petitioned-for unit, then the election must be set aside and re-run with a proper notice to employees. 14

16 CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing Opposition have been served on the following, this 22nd day of March, 2016: Patrick Stewart, Esq. Stewart Law, LLC P.O. Box 6420 Annapolis, MD pat@patlaw.us Brian J. Petruska, Esq. Construction & Master Laborers Local Union No Freedom Drive, Suite 310 Reston, VA BPetruska@maliuna.org Charles Posner Regional Director, Region Five charles.posner@nlrb.gov /s/ Maurice Baskin Maurice Baskin 15