On September 7, 2022, the NLRB issued a notice of proposed rulemaking (NPRM) and requested comment on a revised standard to determine whether multiple entities jointly employ certain employees under the NLRA. The previous test, established by rule in April 2020, required a showing of "direct and immediate" control over employees before an entity could be considered a joint employer. A majority of NLRB seeks to rescind and replace that test, asserting that it "unnecessarily narrow[s] the common law and [...] threaten[s] to undermine the goals of federation labor law."
Under the new standard, entities would be considered joint employers if they directly or indirectly "share or codetermine those matters governing employees' essential terms and conditions of employment," such as wages, benefits, work and scheduling, hiring/discharge, and workplace health and safety.
The NPRM standard reverts back to the one articulated by the Obama-era NLRB in Browning-Ferris Industries of California, Inc. d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 (2015). At issue in Browning-Ferris Industries was whether a contractor (BFI) jointly employed the employees of its subcontractor, Leadpoint. BFI and Leadpoint maintained separate human resources departments and employed separate supervisors at the facility. Leadpoint hired its own employees, scheduled when they worked, disciplined them, and paid them directly. Nonetheless, a majority of the NLRB held that Browning-Ferris Industries jointly employed Leadpoint's employees because:
- BFI supervisors assigned tasks to Leadpoint employees;
- The agreement between BFO and Leadpoint prevented Leadpoint from hiring former BFI employees deemed ineligible for rehire;
- BFI prohibited Leadpoint from paying Leadpoint employees more than BFI paid its own employees for similar work; and
- BFI had the unqualified right to discontinue any Leadpoint worker under the Agreement.
The implications of a joint employer finding are significant. A joint employer would be required to bargain with the union representing the primary employer's employees, would not be protected by secondary boycott restrictions, and could be liable for the primary employer's unfair labor practices.
NLRB Members Kaplan and Ring expressed dissenting views on the NPRM, arguing that the majority "simply purports to expand joint-employer status to the outermost limits of the common law (while actually going beyond those limits) and leaves everything else to case-by-case adjudication."
The NLRB will take comments on the NPRM until November 7 and will collect replies to those comments until November 21.
Authored by David Baron and Kayla Strauss
