Proposed Joint Employer Rule May Have Employers Tied in Knots

19 September 2022 Labor & Employment Law Perspectives Blog
Author(s): Mark J. Neuberger

Earlier this month, the National Labor Relations Board (NLRB) issued a Notice of Proposed Rulemaking (NPR) designed to address the standards the NLRB will use in determining joint employer status under the National Labor Relations Act (NLRA).  If this rule becomes final, employers will be faced with yet another hurdle in trying to distance themselves from liability associated with the employees of their contractors and vendors.

Moreover, if you were thinking, “I have no unions in my workplace, so I have nothing to worry about,” think again. The NLRA applies to a wide range of private sector employers engaged in interstate commerce regardless of whether there is a union present.

The NLRB's approach to analyzing joint employer status has fluctuated widely during the last seven years. First, in 2015 the NLRB issued its decision in Browning-Ferris.1  As we wrote then, the NLRB held that the mere possession of authority over the other entity’s employees is enough to support a finding of joint employer.  Many employers and commentators contended this decision made it extremely difficult not to be found to be a joint employer. Then, following the election of Donald Trump as president, the NLRB’s composition changed.  In February 2020, an NLRB dominated by Trump appointees issued a final rule that significantly pulled back the Browning-Ferris decision. The 2020 rule made it easier for employers to avoid a finding of joint employer. Now that three of the five positions on the NLRB are occupied by appointees of President Joe Biden, the NLRB is taking a more pro-employee approach.

As the NLRB’s summary of the new proposed rule states, “any two or more employers would be considered joint employers if they share or codetermine those matters governing employees essential terms and conditions of employment, such as wages, benefits and other compensation, work and scheduling, hiring and discharge, discipline, workplace health and safety, supervision, assignment, and work rules.”   The proposed rule would define “share or codetermine” to mean “for an employer to possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employees' essential terms and conditions of employment. This is taken from the Browning-Ferris decision and means that if an employer has the ability to exercise control over the other entities’ employees, even if they never exercise such control, they will likely be held to be joint employers.

The two Republican members currently on the NLRB voted against issuing the NPR and feel it is premature to roll back the 2020 rule.  Employers who have employees of contractors regularly coming onto their worksites need to take the time to review the NPR and assess their level of vulnerability if the rule becomes final.  Any interested party may file comments on the NPR before November 7, 2022.  Should you be interested in filing comments, our team of lawyers is available to help.

1 Browning-Ferris Industries of California, Inc., 362 NLRB 1599 (2015)

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services