NLRB proposes return to broad joint employer rule

Published Sept. 6, 2022 - HR Dive
Emilie Shumway, Editor

Dive Brief:

• The National Labor Relations Board Tuesday announced its intention to rescind and replace the joint employer final rule that took effect in April 2020. In its Notice of Proposed Rulemaking, NLRB said the Trump administration's rule “repeats the errors” that the Board corrected in Browning-Ferris Industries, an Obama-era decision that solidified the definition of “joint employer” with respect to the National Labor Relations Act to include those that have “indirect control” over workers.
• In opposition to Browning-Ferris, the 2020 rule stated that an entity may be considered a joint employer of a separate employer’s employees only if it possesses and exercises substantial direct and immediate control over the employees’ essential terms of employment.
• The NLRB will take comments about the proposed rule through Nov. 7, and it will collect replies to those comments through Nov. 21.

Dive Insight:

The NLRB’s joint employer rule has been the subject of a political ping-pong match for years. Progressive groups have argued that the 2020 standard narrowed the intended application of the NLRA by limiting those that could be considered joint employers, while conservatives said it restored the standard that had been in use for decades. Both, in other words, have harkened back to what they see as the original or true intention for the law.

The NLRB’s decision to rescind and replace the 2020 rule followed directly a ruling last month by the U.S. Circuit Court of Appeals for the District of Columbia, which reversed and vacated NLRB orders from 2020 that established that Browning-Ferris wasn’t a joint employer.・/span>

The NLRB’s 2020 orders demonstrated a reversal from its initial 2015 decision, and were prompted by the same court’s response to an NLRB unfair labor practice complaint alleging Browning-Ferris had violated the NLRA. The court issued a limited remand of the NLRB’s decision that found the company was a joint employer, mainly in pursuit of a stronger explanation and clarification of its stance.

But the Board’s makeup had changed with the presidential administration and it reversed its stance on the issue by that time. It dismissed the general counsel’s complaint, held that Browning-Ferris was not a joint employer, and, in response, the union filed a petition for judicial review ・resulting in last month’s decision.・/span>

Business groups have generally favored a narrow joint employer definition. A source previously told HR Dive that before the 2020 rule, navigating joint employer liability post-Browning-Ferris was a “nightmare” for employers. More recently, a source told HR Dive that a new joint employer rulemaking would present “more risk” for employers, correctly predicting the new rule would place joint employer interpretation more in line with the NLRB’s 2015 Browning-Ferris decision.

“In an economy where employment relationships are increasingly complex, the Board must ensure that its legal rules for deciding which employers should engage in collective bargaining serve the goals of the National Labor Relations Act,” NLRB Chairman Lauren McFerran said in a statement the agency released Tuesday. “Part of that task is providing a clear standard for defining joint employment that is consistent with controlling law. Unfortunately, the Board's joint employer standard has been subject to a great deal of uncertainty and litigation in recent years. Rulemaking on this issue allows for valuable input from members of the public that will help the Board in its effort to bring clarity and certainty to these significant questions.”