Board Offers Guidance on Joint Employer Status

In Seven Seas Union Square, the Board applied the possibly (likely?) soon-to-be-overruled decision in Browning-Ferris, and held that a cooperative that exercised control over scope of individual stores’ initial workforce was a joint employer with the individual stores.

The cooperative is comprised of corporate members that include the individual stores that own supermarkets. The cooperative purchased supermarkets previously owned by A&P, which were unionized. The cooperative then sold the recently-purchased markets to the individual stores. The purchase agreements provided that the individual store agreed to be bound by any collective bargaining agreement (CBA) negotiated between the respective unions and the cooperative. The cooperative exercised control over the negotiations for a common CBA that bound all the individual stores and covered employees at all the newly-purchased supermarkets.

In finding that the cooperative and the individual stores were joint employers, the Board held that the cooperative exercised “direct and immediate” control over the employees’ working conditions. Under the purchase agreements, the cooperative had significant control over the scope and identity of each store’s initial workforce. Further, the cooperative referred to itself as an “employer” in the CBAs it reached with the union. The individual store owners distributed an employee handbook entitled “[The Cooperative’s] Rules and Regulations.” Moreover, one store owner told the union that he could not do anything without the cooperative’s approval when the union and the store owner began discussing issues that related to mandatory subjects of bargaining.

With such “direct and immediate” control over employee working conditions, the cooperative would likely be held to be a joint employer even under a more restrictive joint employer standard – and a new standard may be issued soon, given that the Board issued a proposed regulation on this topic in 2018.