The joint-employer rules are changing again at the National Labor Relations Board


Selfishly, a professional perk of a changing White House administration is the business that follows from counseling clients on the new rules when administrative agencies change their rules. For example, as a holdover from the Trump Administration, the Republican majority at the National Labor Relations Board implemented a new joint-employer rule.

Under the new rule, a joint-employer relationship involves one business that possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees.

“Essential terms and conditions of employment” are wages, benefits, work hours, hiring, discharge, discipline, supervision, and direction. “Substantial direct and immediate control” means the regular or continuous consequential effect on an essential term or condition of employment of another employer’s employees. Such control is not “substantial” if it is only exercised sporadically.

What’s the big deal about joint employment? I’ll give you three reasons:

  1. If a union represents the employees, the joint employer must participate in collective bargaining over their terms and conditions of employment.
  2. Picketing directed at a joint employer that would otherwise be secondary and unlawful is primary and lawful.
  3. The Board may find each business comprising the joint employer jointly and severally liable for the other’s unfair labor practices.

Essentially, the Board made it harder to treat two businesses as one.

But now we are in a new presidential administration, and the Democrats have taken control of the Board. That means new rules. And yesterday, the Board released a Notice of Proposed Rulemaking (NPRM) in which it proposed to rescind and replace the joint-employer rule.

According to the Board, “the proposed changes are intended to explicitly ground the joint-employer standard in established common-law agency principles, consistent with Board precedent and guidance that the Board has received from the U.S. Court of Appeals for the D.C. Circuit.”

In other words, we end up with something more union-friendly.

Under the proposed rule, two or more employers are joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” The Board will weigh direct evidence of control and evidence of reserved or indirect control over these essential terms and conditions of employment when analyzing joint-employer status.

Technically, constituents can submit comments by November 7, 2022 for the Board to consider.

In reality, the toothpaste is out of the tube. At least until 2024, or if/when the Republicans next assume control of the Board.

“Doing What’s Right – Not Just What’s Legal”
Contact Information