NLRB Proposes Rule Narrowing Joint Employer Standard

The National Labor Relations Board has announced a proposed rule that would overturn its Obama-era standard for determining when an employer is a joint employer of a separate employer’s workers.
In a joint-employment relationship, each employer must bargain with a union representing the jointly controlled employees, and each can be held liable for unfair labor practices.
Under the proposed rule, which would reverse the 2015 NLRB decision involving Browning-Ferris Industries of California, “an employer may be found to be a joint employer of another employer’s employees only if it possesses and exercises substantial, direct, and immediate control over the essential terms and conditions of employment [e.g., wages, benefits, hiring, firing, discipline, supervision, and direction] and has done so in a manner that is not limited and routine,” the NLRB said in a statement.
“Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.”
The NLRB actually overturned the Browning-Ferris decision in December of last year and returned to the pre-Browning Ferris standard, which held that proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.

However, that decision was vacated after a determination by a board ethics official that NLRB member William Emanuel should have been disqualified from participating in the decision because of his relationship to the law firm involved in the original Browning-Ferris case.
The new proposed rule represents the current NLRB's effort to reverse the Browning-Ferris standard once and for all.
In its announcement, the board said that the new rule would "foster predictability, consistency, and stability in the determination of joint-employer status" and "reflects the board majority's initial view, subject to potential revision in response to public comments, that the National Labor Relations Act's intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees."
Comments on the proposed rule must be received by the NLRB on or before Nov. 13, 2018, and may be submitted online.

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