Earlier this month, the NLRB announced it would seek to make yet another change to its rule regarding the determination of joint- employer status for purposes of union organization and collective bargaining. As we explained in a previous blog post, the NLRB had long held that in order in order for an organization to be considered a joint employer of a worker or group of workers, the organization had to actually exercise regular control over important aspects of the workers’ wages and working conditions. In 2015, the NLRB reversed that decades-long precedent in its Browning-Ferris Industries decision. In that decision, the Board held that in order for an organization to be a joint employer, the organization must merely possess the authority to control employees’ terms and conditions of employment, either directly or indirectly. Thus, the Board held that even though an employer may not have actually exercised any direct control over another entity’s employees, it could still be a joint employer if it had the authority to do so, such as under the terms of a contract with a temporary agency, as was the case in Browning-Ferris Industries.
That ruling meant that employers that contracted with temporary agencies could be required to bargain with unions that represented their temporary workers. It also meant that they could be held liable for unfair labor practices committed by a temporary agency. The ruling had similar implications for entities in a franchisor-franchisee relationship. The NLRB’s new proposed rule would change the standard back to the pre-Browning Ferris Industries standard; specifically, “that an employer may be considered a joint employer of another employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.”
The NLRB’s fact sheet on the proposed rule states that “the intent of the proposed rule is to foster predictability and consistency regarding determinations of joint-employer status in a variety of business relationships, thereby promoting labor-management stability.” According to the NLRB, the Browning-Ferris Industries decision created instability in the law in cases where an entity never actually exercised any authority over the workers in question or where any exercise of authority was very limited – for example, stating only when and where it needed work to be performed.
The NLRB is seeking public comment on the proposed rule. Comments may be submitted online through http://www. regulations.gov or by mail or hand delivery to: Roxanne Rothschild, Associate Executive Secretary, National Labor Relations Board, 1015 Half Street SE, Washington, DC 20570-0001. All comments must be received by the NLRB by November 13, 2018.