February 23, 2026|Franchise Frontlines
February 23, 2026 | National Labor Relations Board | Published Decision
Executive Summary
In a published decision, the National Labor Relations Board reaffirmed that Browning-Ferris Industries of California was a joint employer of workers supplied by a staffing contractor at its recycling facility. The Board issued the decision on remand from the United States Court of Appeals for the District of Columbia Circuit and clarified the joint-employer framework first articulated in the Board’s 2015 Browning-Ferris decision. The employer argued that its relationship with the staffing agency reflected a typical contractor arrangement and that its actions amounted only to routine oversight of a third-party service provider. The Board disagreed. Applying the clarified standard, it concluded that Browning-Ferris exercised both direct and indirect control over essential terms and conditions of employment, including work assignments, the manner and means of job performance, and wage constraints. The Board therefore reaffirmed that Browning-Ferris violated the National Labor Relations Act by refusing to bargain with the union representing the workers.
Relevant Background
Browning-Ferris Industries operates a large recycling facility in Milpitas, California that processes approximately 1,200 tons of waste and recyclable material each day. To support the operation, Browning-Ferris contracted with Leadpoint Business Services, a staffing company that supplied more than 240 workers to perform sorting, cleaning, and housekeeping functions inside the facility.
The contractual relationship placed formal responsibility for hiring, discipline, and payroll with Leadpoint. Leadpoint maintained its own supervisors, human resources department, and benefits programs. Browning-Ferris also maintained a separate workforce at the facility, including equipment operators, forklift drivers, and control-room personnel who oversaw the processing lines.
Despite the formal division of responsibilities, the record reflected significant interaction between Browning-Ferris management and Leadpoint’s workers. Browning-Ferris supervisors determined how many workers were needed for each processing line, set the facility’s operating schedule, controlled the speed of the conveyor systems used for sorting materials, and regularly communicated operational instructions regarding work performance.
The relationship also included contractual provisions affecting wages. While Leadpoint set pay rates for its employees, the contract prohibited Leadpoint from paying workers more than Browning-Ferris employees performing comparable work. Browning-Ferris also played a role in approving wage adjustments tied to changes in local minimum-wage requirements.
A union sought to represent the Leadpoint workers and argued that Browning-Ferris and Leadpoint were joint employers. The litigation that followed produced a long procedural history, including the Board’s 2015 Browning-Ferris decision, review by the D.C. Circuit in 2018, additional Board proceedings in 2020, and a second remand from the court in 2022 requiring the Board to clarify how indirect control should factor into the joint-employer analysis.
Decision
The Board reaffirmed that the governing inquiry asks whether two entities “share or codetermine those matters governing the essential terms and conditions of employment.” Applying that framework, the Board clarified that evidence of control—whether direct, indirect, or reserved—must relate to essential terms and conditions of employment, rather than routine aspects of a commercial contract between two businesses.
The Board emphasized that ordinary contractual provisions establishing performance expectations or service objectives do not, by themselves, establish joint-employer status. In contrast, evidence demonstrating control over the manner, means, or details of workers’ performance is probative of joint-employer status.
Applying those principles, the Board concluded that Browning-Ferris exercised substantial direct control over several core aspects of the Leadpoint workers’ employment. Among other things:
- Browning-Ferris unilaterally controlled the speed of the material-sorting lines, which directly dictated the pace of work performed by Leadpoint workers.
- Browning-Ferris supervisors issued instructions regarding how workers should perform sorting tasks and how materials should be processed.
- Browning-Ferris managers regularly directed workers regarding cleanup tasks and operational procedures.
- Browning-Ferris controlled the number of workers required on particular lines and influenced daily staffing decisions.
The Board also found that Browning-Ferris exercised meaningful influence over wages by imposing a contractual wage ceiling that prevented Leadpoint from paying its workers more than Browning-Ferris employees performing similar work. According to the Board, that restriction effectively gave Browning-Ferris control over a core term of employment because Leadpoint could not independently raise wages beyond the cap.
In addition to this direct control, the Board concluded that Browning-Ferris exercised indirect control through its communications with Leadpoint supervisors regarding worker performance and discipline. For example, Browning-Ferris managers reported misconduct and requested the dismissal of particular workers, which Leadpoint ultimately carried out.
Taken together, the Board determined that these forms of control involved essential terms and conditions of employment—including work assignments, wages, and the manner in which work was performed—and were sufficient to support joint-employer status. The Board therefore reaffirmed its prior finding that Browning-Ferris violated the National Labor Relations Act by refusing to bargain with the union representing the workers.
Looking Forward
Although the decision applies the joint-employer framework from the earlier Browning-Ferris litigation, it provides a useful illustration of how regulators and courts may evaluate operational control in complex multi-entity work environments. The Board’s reasoning focuses heavily on whether a putative employer influences the manner, means, and pace of work, as opposed to merely establishing performance expectations within a commercial contract.
For franchisors and other branded systems that operate through independent operators, the decision highlights the importance of distinguishing between brand standards and operational control. Courts and agencies have historically recognized that franchisors may impose quality standards to protect brand integrity. However, when a brand owner or system operator becomes involved in directing day-to-day work performance, setting wage constraints, or dictating staffing levels, those actions may attract closer scrutiny under joint-employer theories.
The decision also illustrates how contractual provisions affecting wages or discipline can influence the analysis. Even where another entity formally employs the workers, contractual provisions that constrain compensation structures or allow the user entity to request worker removal may be cited as evidence of shared authority over essential employment terms.
Finally, the long procedural history of the Browning-Ferris litigation underscores how frequently the joint-employer doctrine has shifted over the past decade through Board decisions, rulemaking, and judicial review. For franchisors and other multi-unit systems, this continuing evolution reinforces the importance of carefully structuring operational relationships and documentation to maintain appropriate separation between brand standards and employment control.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
