NLRB Proposes Joint Employer Rule
The National Labor Relations Board (“NLRB” or “Board”) issued a release on September 13, 2018 stating its intent to publish a proposed rule regarding its joint employer analysis in the Federal Register. That is an initial step towards adopting a formal regulation. This is a departure from the Board’s typical process of making substantive legal rulings via case law decisions. The rule making procedure is more cumbersome and takes a significant period of time. It seems apparent that is one of the very reasons the current Board has chosen to use rule-making in this instance. Perhaps the procedural time and difficulty of withdrawing or revising an established regulation will deter future Boards from attempting to do so, thereby giving stability to the Board’s analysis on this subject.
With respect to the proposed standard, the Board’s release stated that under it “an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.” This is a more demanding standard than under the current Browning-Ferris case, which provides that indirect control and matters such as contractual rights to require removal of employees from service for that employer can be used to establish joint employer status.
For now the Browning-Ferris standard remains in place. And the rule-making process takes time. So Browning-Ferris will remain in place until at least some time next year. Its days appear to be numbered, however, which is good news for employers.