The NLRB Proposes New Joint Employer Standard

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On September 14, 2018, the National Labor Relations Board (NLRB) published a Notice of Proposed Rulemaking for the joint-employer standard. Under the proposed rule, entities would be joint employers "if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction." Further, in order to constitute a joint employer relationship, an employer would need to exercise "direct and immediate control" over employment terms and conditions of another employer's employees in a manner that is "not limited and routine."

By issuing the notice of proposed rulemaking, the NLRB has essentially announced its intention to return to the joint-employer test announced in its Hy-Brand decision, which was unanimously vacated in December. The NLRB's decision to use rulemaking in this area was not unexpected, as its Chairman John Ring announced it would do so earlier this year.

With the formal publishing of the proposed rule, the public comment period is now open. Comments must be received by the NLRB by November 13, 2018 and reply comments must be received by the NLRB by November 20, 2018. During the comment period and until the proposed rule is formerly adopted, Browning-Ferris is still the test for determining joint employer status. Under Browning-Ferris, an entity is a joint-employer even if it only exercises "indirect control," "limited and routine" control, or has (even if it never uses) a reserved right to control essential employment terms and conditions.

We will continue to provide updates on the NLRB's ongoing saga to define the test for determining joint employer status.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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