The National Labor Relations Board issued a decision that serves as a reminder to employers of their bargaining obligations upon implementing changes to their business. Rigid Pak Corp., 366 NLRB No. 137 (2018) involves a unionized company (“Rigid”) that manufactured and sold plastic products. Rigid maintained an injection-molding division and a blow-molding division housed on different sides of its facility. The injection-molding division manufactured open-head containers, lids, and crates while the blow-molding division manufactured plastic bottles. In 2014, Rigid encountered various financial difficulties, and to address them, the company entered into a supply agreement to outsource its work to a third-party manufacturer.
In a brief filed on September 7, 2016 (“NLRB Brief”), the National Labor Relations Board (“NLRB” or “the Board”) urged the United States Court of Appeals for the District of Columbia Circuit to uphold its new “joint employer” standard, set forth in Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015). Through this new standard, the Board now seeks to impose collective bargaining and other NLRA obligations on companies that may indirectly control certain conditions of employment, or that merely reserve (but do not exercise) such control. Casting aside the more precise “direct and immediate control” standard it explicitly adopted in 1984, the Board in Browning-Ferris opted instead to analyze joint control issues on a fact-specific, case-by-case basis, with a greater focus on reserved and indirect control. The case on appeal is entitled Browning-Ferris Industries of California, Inc., d/b/a/ Browning-Ferris Newby Island Recyclery v. National Labor Relations Board, Nos. 16-1028, 16-1063 and 16-1064.