NLRB Proposes Revised Joint Employment Rule

Author: Robert S. Teachout, XpertHR Legal Editor

UPDATE: The NLRB announced on October 30, 2018 that the deadline for public comments on its proposed joint employer rule is extended for 30 days until December 13, 2018.

September 13, 2018

The National Labor Relations Board (NLRB) has announced it is issuing a Notice of Proposed Rulemaking (NPRM) to redefine the standards for determining whether two or more employers are joint employers under federal labor law. The proposed rule was expected following statements in June by NLRB Chairman John Ring that the board was planning to engage in the federal rulemaking process in order to consider and address joint employment issues in a comprehensive manner.

The proposed rule would undo the Obama board's Browning-Ferris decision that made it much easier for employers to be considered joint employers under the National Labor Relations Act (NLRA) and thereby jointly liable for any labor law violations. Browning-Ferris held that two entities would be considered a joint employer even if they exercised only indirect control of shared employees or reserved the right for such control.

Under the proposed rule, an employer would be considered a joint employer only if the two employers share or codetermine the employees' essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction. Specifically, the regulation states that an employer must possess and exercise "substantial, direct and immediate control over the essential terms and conditions of employment and have done so in a manner that is not limited and routine."

The attempt at rulemaking follows the Republican-led board's earlier attempt, in its Hy-Brand Industrial Contractors ruling, to reverse Browning-Ferris. However, the Hy-Brand ruling was itself reversed by the board after the NLRB's inspector general said that one of the board's Republican members should have been disqualified from taking part in the decision.

The NLRB will accept comments for 60 days following publication of the NPRM in the Federal Register on September 14, 2018.