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NLRB proposes new joint-employer definition, to largely roll back Obama-era standard

September 13, 2018

The National Labor Relations Board announced it will publish a Notice of Proposed Rulemaking tomorrow in the Federal Register regarding its joint-employer standard. Chairman John Ring promised the move earlier this year.

At issue is an NLRB decision back in 2015 that expanded the definition of joint employer. Then, the NLRB ruled that staffing firms workers at Browning-Ferris Industries recycling facility in Milpitas, Calif., were joint employees of both BFI and the staffing firm. It allowed unions to negotiate for both direct hired and staffing firm workers on the site. The NLRB tried to change that decision last December in a test case, but that ruling was overturned after it was found one board member should have recused himself.

Bloomberg Law reported today’s proposal by the NLRB would largely return to the definition before the 2015 President Obama-era decision and mean fewer businesses would be tagged as joint employers.

Under the proposed rule announced today by the NLRB, an employer may be found to be a joint employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.

The new rule would “foster predictability, consistency and stability in the determination of joint-employer status,” the NRLB stated. “The proposed rule reflects the board majority’s initial view, subject to potential revision in response to public comments, that the National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.”

Ring and board members Marvin Kaplan and William Emanuel proposed the new joint-employer standard; board member Lauren McFerran dissented.