NLRB Directors Told to Pull Back on Joint Employer Doctrine

NLRB Directors Told to Pull Back on Joint Employer Doctrine

Peter Robb, who was confirmed as the new general counsel of the National Labor Relations Board last month, advised the board’s regional directors in a recent memo to submit any cases based on the Obama administration’s controversial expansion of the “joint employer” standard for liability to the Board’s Advice Division in Washington for analysis, the Washington Examiner reported late last week:

Robb cautioned the directors against issuing complaints based on the controversial standard adopted during the Obama administration and instead told them to seek advice from the Washington headquarters.

“Examples of board decisions that might support issuance of complaint but where we also might want to provide them with an alternative analysis include … Finding joint employer status based on evidence of indirect or potential control over the working conditions of an employer’s employees,” Robb said in a memorandum dated Dec. 1 to all regional directors.

In order to avoid delays, Robb also wrote in the memo that his office would not be offering new views on cases already pending in courts.

The NLRB’s Browning-Ferris decision in 2015 established a precedent for “joint employer” to include entities with which a business has indirect control, or a horizontal relationship, making them responsible for franchisees’ or contractors’ compliance with the Fair Labor Standards Act and other employee protection laws. Previously, a company was only liable for those under its direct control.

In January 2016, the Labor Department’s Wage and Hour Division issued an administrator’s interpretation holding that these regulations should apply to both “vertical” and “horizontal” joint employment. In June, after the presidential changeover, newly appointed Secretary of Labor Alexander Acosta rescinded that guidance. Acosta’s action did not prevent the NLRB, an independent agency, from pursuing joint employer complaints based on the Obama-era standard. Robb’s recent memo, however, appears to be a first step for the board toward abandoning the expanded definition.

Five legislators introduced a bill in Congress in July that would limit the scope of joint employer liability for the NLRB’s purposes, such that a person or entity is a joint employer “only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of [a worker’s] employment.” The lead sponsor of the bill, Rep. Bradley Byrne, R-Ala., believes President Donald Trump will surely sign it into law if it passes both houses of Congress.