The NLRB Proposes to Re-Re-Revise Its Joint Employer Standard

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On September 6, 2022, the National Labor Relations Board (the “Board”) issued a notice of proposed rulemaking ("NPRM") regarding the standard for determining joint employer status under the National Labor Relations Act ("NLRA"). The rule as proposed would effectively overturn a rule on the same subject issued just over two years ago during the Trump administration. 

Joint employment status has been a bit of a tennis match since President Obama’s second term when that Board made it easier to find joint employment status. In the 2015 case known as Browning-Ferris, the Obama-era Board ordered the employer to bargain with employees of a staffing company that were working on its site, broadening the joint employer test to include companies like Browning-Ferris even if they have only “reserved or indirect control” over workers.

In 2020, President Trump’s appointees to the Board sought to reign back the joint employer test via rulemaking.  The Board found that for an employer to be a joint employer of workers at its site (e.g., temporary agency employees), the employer must exercise “direct and immediate” control over those workers.

In the latest chapter of the joint employer saga, the Board now proposes to replace the 2020 rule with a broader standard of determining joint employer status. If the Board’s proposed rule is implemented as written, two or more employers would be considered joint employers if they "share or codetermine those matters” involving essential terms of employment, like wages and benefits. The proposed rule also expands the criteria that the Board examines from the traditional terms of employment (e.g., wages, benefits, hours of work, discipline, etc.) to now include other factors such as work assignments, workplace health and safety measures, and work rules and directions governing the manner, means or methods of work performance. Put simply, the Board’s proposed rule likely will result in far more joint employer situations, particularly where staffing companies are used side-by-side with regular employees.

If two entities are joint employers under the NLRA, both must bargain with the union that represents the jointly employed workers, both are potentially liable for unfair labor practices (even if only one of the joint employers actually commits the ULP), and both are subject to union strikes and picketing during a labor dispute. The Board’s proposed rule will be published in the Federal Register, and the public has until November 7, 2022, to submit comments or feedback.

Staffing companies, businesses that utilize staffing companies, and businesses that lease or otherwise share employees or have integrated human resources functions, should be aware of this impending shift and review their policies and practices to avoid any unintended consequences.

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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