D.C. Circuit Rejects Labor Board Joint Employer Determination

On August 4, 2017, the U.S. Court of Appeals for the District of Columbia Circuit refused to enforce a holding by the National Labor Relations Board (Board) that the Cable News Network (CNN) was a joint employer.1 In the opinion, authored by Chief Judge Merrick Garland, the court found that the Board failed to adequately grapple with its conflicting precedent concerning what relationships constitute "joint employment."

Historically, CNN relied on service contractors to provide technical support, such as camera operators, sound and studio technicians, and broadcast engineers. These workers were represented by a union, the National Association of Broadcast Employees and Technicians. Beginning in 2003, CNN decided to move away from that approach and to directly hire these types of workers for two of its news bureaus. It terminated its service contracts and engaged in its own hiring process to fill the technical positions. Ultimately, the union and the Board's General Counsel filed complaints against CNN challenging its actions.2

The administrative law judge (ALJ) concluded that CNN had been a joint employer of the contractual employees prior to the termination of the service contracts. As a result, he found that CNN had been bound by the collective bargaining agreements with the workers' union. The ALJ held that CNN had violated the National Labor Relations Act because, while a joint employer, it had allegedly unlawfully terminated the service contracts and had failed to bargain with the union about that decision. The ALJ also found CNN liable as a successor employer for various purported violations. The Board upheld the ALJ's holdings on appeal and ordered certain remedies.3

The D.C. Circuit readily disagreed with the Board's conclusions about CNN's status as a joint employer. The court did not address any underlying evidence but flatly rejected the Board's joint employer holding as a legal matter. The court emphasized that the Board, citing two 1984 orders, identified the appropriate standard of review as to whether the asserted joint employers "share or codetermine those matters governing the essential terms and conditions of employment."4 As the court pointed out, after setting forth this standard, the Board acknowledged in a footnote that more recent precedent imposed a more stringent standardwhich it did not applyrequiring "direct and immediate control." Despite identifying these inconsistent standards, the Board made no effort to...