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NLRB General Counsel Proposes (More) Stringent Joint Employer Standard


Readers will recall that the President Barack Obama era National Labor Relations Board (“NLRB”) turned things upside down when a decision was issued in Browning-Ferris which established that a company could be held to be a joint employer (of a contractor or another business) if the company exerted direct or indirect control over the terms of the worker’s job.  This changed the ‘traditional’ joint employer standard which stipulated that direct and immediate control was required for joint employer liability to exist.  Since the Browning-Ferris decision, which allowed for indirect control to also be an avenue to establish joint employer liability, employers and business groups began to urge the NLRB to revert the joint employer standard to its traditional form, prior to Browning-Ferris.

After several false starts, including the Hy-Brand Industrial Contractors, Ltd. decision which was vacated due to ethical concerns over the involvement of NLRB Board Member Emanuel in the Hy-Brand decision, the NLRB decided to invoke a rule making procedure to codify the change to the joint employer standard and avoid other potential conflict issues with subsequent decisions.  In September, the NLRB published in the Federal Register a proposed joint employer standard which provided an employer would be considered a joint employer of a separate employer’s employees only if the two employers shared or co-determined the employees’ essential terms and conditions of employment, such as firing, discipline, supervision, and direction.  As well, the putative joint employer would be required to exercise substantial, direct, and immediate control over the employees’ essential terms and conditions of employment that is not limited and routine.  Consequently, this proposed rule would do away with the Browning-Ferris direct or indirect joint employer standard.  For the most part, employers and business groups hailed this proposed codification as suitable.

Well pump the brakes.  Last week, the NLRB’s General Counsel, Peter Robb, surprised many when he suggested that the NLRB’s proposed joint employer standard did not go far enough as he felt it would improperly force certain companies to bargain with unions.  Robb instead has argued that an employer would not have to bargain with a union unless it controls “all listed essential terms and conditions of employment.”  As well, Robb noted that an employer should be liable for a co-emoloyer’s unfair labor practices only if it participated in the unlawful conduct.  These comments from Robb have the potential to drastically push the joint employer standard even further from what many thought would be approved by the NLRB.  Notably, Robb’s inclusion of “all” would make this proposed rule extremely friendly toward employers and make establishing joint employer liability much more difficult for labor unions and employees.

At this point, the NLRB has to respond to Robb’s proposed reformulation of the joint employer standard. This could result in the NLRB amending its proposal to coincide with Robb’s and/or choosing to open the public comment period again to solicit further opinions.  For the time being, the proposed codification of the joint employer standard will be (potentially significantly) delayed while the NLRB reviews things further.  In any event, the General Counsel’s suggested changes to the current proposal under review should serve as a warning to labor unions and their supporters that big changes are likely afoot in regard to the joint employer standard that are potentially much less favorable than what would have taken effect following the Hy-Brand decision.

Stay tuned.


For additional information:  https://news.bloomberglaw.com/daily-labor-report/nlrb-general-counsel-joint-employer-proposal-falls-short-1

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