NLRB Releases Notice of Proposed Rulemaking on Joint-Employer Status

Last week, the National Labor Relations Board (NLRB) published in the Federal Register a notice of proposed rulemaking and request for comments on the standard for determining joint-employer status. All comments must be received on Nov. 13, 2018.

Under the proposed rule, an employer may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employee’s essential terms and conditions of employment, such as hiring, firing, discipline, supervision and discretion. A putative joint-employer must possess and exercise substantial direct and immediate control over the employee’s essential terms and conditions of employment in a manner that is not limited and routine.

There have also been attempts by 124 Members of the House of Representatives who support H.R. 3441, the “Save Local Business Act”, which amends the National Labor Relations Act and Fair Labor Standard Act of 1938 to revert to the previous determination of a joint-employer before the Obama Administration’s Browning-Ferris decision. The bill passed the U.S. House on Nov. 7, 2017 but has not seen action in the U.S. Senate.

In August 2015, a divided NLRB overruled longstanding precedent and substantially relaxed the evidentiary requirements to find a joint-employer relationship. (Browning-Ferris Industries of California, Inc. dba BFI Newby Island Recyclery, 262 NLRB No. 186 (2015)). The majority in the Browning-Ferris decision explained that, under its new standard, a company could be deemed a joint-employer even if its “control” over the essential working conditions of another business’s employees was indirect, limited and routine, or contractually reserved but never exercised.

In December 2017, after a change in the NLRB’s composition and while Browning-Ferris was pending an appeal in the D.C. Circuit, a new NLRB majority overruled Browning-Ferris and restored the preexisting standard that required proof that a joint-employer exercised direct and immediate control in a manner that was neither limited nor routine (Hy-Brand Industrial Contractors, Ltd. Decision).

TIA’s Government Affairs staff will work with the Operations and Labor Committees to compile comments and feedback on this issue. If you have any questions, please contact TIA Advocacy at advocacy@tianet.org.