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Happening Today: NLRB’s Joint Employer Rule Goes Into Effect


Today, the National Labor Relations Board’s (“NLRB”) final rule for joint employer status goes into effect after what many would call a prolonged process.

Readers might recall that for many years, the NLRB had determined whether an employer was a joint employer depending upon whether that company had direct control over the workers’ employment terms.  That joint employer standard got turned on its head with the 2015 Browning-Ferris decision which expanded the joint employer test to include both direct and indirect control over workers (even if that control was not exercised.)

When the NLRB took on a more conservative/employer friendly tilt after President Donald Trump came into office, the NLRB issued its 2017 Hy-Brand decision which attempted to undo the standard set in Browning-Ferris and revert back to direct control being the only qualifying factor to determine joint employer status.  However, as some might remember, the Hy-Brand decision was vacated not long after...which meant the Browning-Ferris direct and indirect control joint employer standard remained in place.

Fast forward a bit and the NLRB decided to use rulemaking to implement its preferred joint employer standard (rather than finding another case and issuing another decision.)  Under the final rule, a joint employer is now defined as an employer that codetermines another employer’s employees’ essential terms and conditions of employment.  Employers “share or codetermine” these terms and conditions of employment where they possess and exercise substantial direct and immediate control over one or more essential terms or conditions of employment that meaningfully affect matters relating to the employment relationship.

Unlike the Browning-Ferris standard, evidence of indirect control and unexercised authority over the essential terms and conditions of employment has no impact on this new joint employer standard.  As well, it is worth noting that the party that is asserting joint employer status now bears the burden of proof.

One final note:  The NLRB’s joint employer standard only applies to joint employer liability under the National Labor Relations Act.  The Labor Department has issued its own joint employer standard for claims made under the Fair Labor Standards Act.  The Equal Employment Opportunity Commission is expected to issue its own joint employer standard for claims made under federal discrimination statutes.


For additional information:  https://nlrb.gov/news-outreach/news-story/nlrb-issues-joint-employer-final-rule

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