EEOC Joins in the Holiday Festivities by Adding Proposed Joint-Employer Rulemaking to its ‘To Do’ List

02 December 2019 Labor & Employment Law Perspectives Blog
Authors: Angelica L. Novick

In mid-November, the Trump administration published its fall agenda. Of interest to employers, that agenda included a notice from the Equal Employment Opportunity Commission (EEOC) that it intends to clarify its joint-employer analysis for assessing potential liability under some of the laws the agency enforces. The EEOC stated in its notice that by year-end it intends to propose “amendments” to several of the laws it is tasked with enforcing, including Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. The notice further stated that the agency intends to “consolidate the EEOC’s position on the topic to regulatory locations that are easier for the public to find.” 

In doing so, the EEOC is joining the National Labor Relations Board (NLRB) and the U.S. Department of Labor (DOL), which are currently finalizing revised rules on their respective joint-employer standards. In 2018, the NLRB proposed a rule clarifying its joint-employer standard by reversing the 2015 Browning-Ferris decision, which had significantly expanded the scope of joint-employer liability under the National Labor Relations Act (NLRA). While the NLRB essentially reversed that standard in its 2017 Hy-Brand Industries decision, its proposed rule would codify that change. 

If finalized, the NLRB’s rule would reinstate a pre-2015 test under which a business is only a joint employer if it has direct and immediate control of another business’s workers. The previous standard was that two entities can be joint employers under the NLRA if one of the entities had even “indirect control” over the essential terms and conditions of employment of the other entity’s employees. 

This past spring, the DOL also proposed an update to its longstanding framework for analyzing joint-employer liability under the Fair Labor Standards Act (FLSA). The DOL’s proposed rule states that any analysis of potential joint-employer liability should focus on whether the potential joint-employer’s actions actually affect the terms and conditions of the workers’ employment. The final language of this proposed rule is especially important because if two businesses are joint employers under the FLSA, those businesses share responsibility for any employee pay violations. Both the NLRA and the DOL estimate that their pending rules will issue before the end of the year. 

Based on these pending updates as to how the EEOC, NLRB, and DOL, respectively, approach joint-employer liability, the normally quiet holiday season is shaping up to be quite a busy time for these agencies and employers alike. We will continue to monitor these agencies’ rule releases, and will provide timely updates as new rules are announced.

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