NLRB Will Propose Joint Employment Rule Soon
Author: Michael Cardman, XpertHR Legal Editor
June 7, 2018
The National Labor Relations Board (NLRB) will propose rules for determining whether one business is the joint employer of another business's employees under federal labor law by this summer.
Great uncertainty has surrounded the state of joint employment under the National Labor Relations Act (NLRA) in recent months.
In 2015, the NLRB ruled in the Browning-Ferris case that employers can be considered to be joint employers under the NLRA even if they exercise only indirect control of shared employees or reserve the right to control shared employees.
Late last year, the NLRB issued its Hy-Brand Industrial Contractors decision, which overturned Browning-Ferris and restored a decades-old standard under which an employer must, among other things, exercise "direct and immediate" control over shared employees to be considered a joint employer. Business groups welcomed Hy-Brand as "a much-needed dose of predictability into planning their third-party business relationships."
Then, on February 9, the NLRB's inspector general said that one of the NLRB's Republican members, William Emmanuel, should have been disqualified from taking part in Hy-Brand because his law firm had represented one of the parties in the Browning-Ferris decision. This opened the door for a three-member panel comprising two Democrats and one Republican to vacate Hy-Brand, thereby restoring the Browning-Ferris decision.
"The current uncertainty over the standard to be applied in determining joint-employer status under the Act undermines employers' willingness to create jobs and expand business opportunities," NLRB Chairman John F. Ring said last month.
The NLRB can set policy through the federal regulatory process or by decision. Last week, Senate Democrats raised concerns that the NLRB would attempt to overturn Browning-Ferris by rulemaking in order to circumvent the ethics restrictions that apply to how it issues decisions.
Rulemaking will allow the NLRB to "consider and address the issues in a comprehensive manner and to provide the greatest guidance," Ring replied. "Although legal standards of general applicability can be announced in a decision of a specific case, case decisions are often limited to their facts. With rulemaking, by contrast, the Board will be able to consider and apply whatever standard it ultimately adopts to selected factual scenarios in the final rule itself.
"In this way, rulemaking on the joint-employer standard will enable the Board to provide unions and employers greater 'certainty beforehand as to when [they] may proceed to reach decisions without fear of later evaluations labeling [their] conduct an unfair labor practice,' as the Supreme Court has instructed us to do."