NLRB to Propose New Joint Employer Rules This Summer

NLRB to Propose New Joint Employer Rules This Summer

The US National Labor Relations Board intends to take the first step toward creating a new regulation regarding the definition of “joint employers” for federal regulatory purposes by the end of this summer, NLRB Chairman John F. Ring wrote in a letter to three Senators this week. The letter to Democrats Elizabeth Warren and Kirsten Gillibrand, and Independent Senator Bernie Sanders, was in response to a letter the legislators had sent to the board chairman expressing their concerns about the board’s intent to introduce a new joint employer standard through the federal rulemaking process.

“A majority of the Board is committed to engage in rulemaking,” Ring wrote in the letter dated June 5, “and the NLRB will do so. Internal preparations are underway, and we are working toward issuance of a Notice of Proposed Rulemaking (NPRM) as soon as possible, but certainly by this summer.”

The joint employer standard, which refers to an organization’s liability for the work conditions of individuals employed by its contractors or subcontractors, was expanded considerably during the Obama administration, when the NLRB ruled in a 2015 case called Browning-Ferris that a company was to be considered a joint employer if it had “indirect” control over the subcontractor’s terms and conditions of employment or “reserved authority” to exercise such control. The board reversed that decision in the Hy-Brand case decided late last year, but vacated its Hy-Brand ruling in February after one member of the board who participated in that decision, William Emanuel, was found to have a conflict of interest.

On Wednesday, the board reaffirmed that it would not reconsider its decision to vacate Hy-Brand, in a further indication of its intent to resolve this issue through rulemaking rather than case litigation. Members of the Republican-majority board is understood to favor a more limited standard than that adopted by their predecessors during the Obama years, but as both Emanuel and Ring himself have professional backgrounds in large management-side employment law firms, it has been difficult for them to find a case from which at least one of them would not have to be recused. The rulemaking process is a more straightforward, albeit slower, method for revising the regulation.

Democratic members of the board, along with left-leaning lawmakers like Gillibrand, Sanders, and Warren, have indicated that they will fight efforts to return to a more restrictive standard. Advocates of a more expansive joint employer standard contend that the narrower definition deprives employees of franchises and contractors of essential rights, but opponents say it unfairly makes companies liable for the treatment of workers they do not actually employ and over whom they have no direct control.