Have you noticed the flip-flop on Joint Employer Standards from the National Labor Relations Board (NLRB)? Currently, the standards are in flux. In 2015, the definition of a joint employer was modified and expanded based on the Browning-Ferris Industries case. This case changed over 30 years of precedent that had required “direct” and “immediate” control over an employee’s working conditions to “indirect” and “potential” control as the new definition of joint employment.
Under the Browning-Ferris standard, even if two entities never exercised joint control over the essential terms and conditions of employment, and any joint control was not direct and immediate, there could still be joint employers based on: (1) the existence of reserved joint control, (2) indirect control, or (3) control that was limited and routine. Browning-Ferris was considered controversial and criticized by many employers and business groups.
In December 2017, in an attempt to rein in what was perceived as a broad and vague standard, the NLRB re-established the pre-Browning-Ferris standard in the Hy-Brand Industrial Contractors case which returned the former joint employer test requiring “direct” and “immediate” control.
To the dismay of many in the business community, in February 2018, due to an alleged conflict of interest, the NLRB vacated the Hy-Brand case, leaving Browning-Ferris as the law of the land once again. Prior to Browning-Ferris, the NLRB relied on decades of legal precedent to set the joint employment standard.
In May 2018, the NLRB announced its intention to clarify the joint employer standard by issuing a new rule to reinstate the pre-Browning-Ferris joint employer standard. On September 14, 2018, the NLRB published a Notice of Proposed Rulemaking (NPRM) in the Federal Register regarding its joint-employment standard (allowing 60 days for public comments). The proposed rule reflects a return to the previously longstanding standard that an employer may be found to be a joint-employer when the following condition exists:
- A joint-employer of another employer’s employees exists 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.
The 60-day period for public comments continues through November 13. After the NLRB reviews the public comments and replies, it will issue a final rule regarding the joint employer standard. If issued without substantial changes, this rule will provide employers with a more clear and consistent standard and reduce the likelihood of an employer inadvertently becoming a joint employer.
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