For the second time in less than four years, the National Labor Relations Board has changed its definition of a “joint employer.”
According to a final rule published Oct. 27, NLRB is returning to its previous definition of a joint employer: when two or more entities “share or codetermine” one or more of an employee’s essential terms and conditions of employment. Those “essential terms and conditions” include worker safety and health. Others:
- Wages, benefits and other compensation
- Hours of work and scheduling
- Assignment of duties to be performed
- Supervision of the performance of duties
- Work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline
- Tenure of employment, including hiring and discharge
“The 2023 rule more faithfully grounds the joint-employer standard in established common law agency principles,” an NLRB press release states. “In particular, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.
“The common law clearly recognizes that reserved control and indirect control are relevant to the analysis. By contrast, the 2020 rule made it easier for actual joint employers to avoid a finding of joint-employer status because it set a higher threshold of ‘substantial direct and immediate control’ over essential terms of conditions of employment, which has no foundation in common law.”
In the release, NLRB Chair Lauren McFerran says the board will still determine on a case-by-case basis whether two or more employers meet the “joint employer” standard.
The recent tug-of-war over what constitutes a “joint employer” began in August 2015, when the board ruled that Browning-Ferris Industries of California and contractor Leadpoint Business Services were joint employers. That decision stemmed from a 2013 dispute between the companies and Sanitary Truck Drivers and Helpers Local 350, part of the International Brotherhood of Teamsters, which sought to represent Leadpoint’s recycling workers.
In 2017, the board, under Republican control, went back to its joint-employer test from the 1980s-era NLRB and overruled its 2015 decision. In 2020, NLRB put forth a regulation using that stricter test for joint employers.
The 1980s-era NLRB required that joint employers “(1) ‘actually’ exercise control, (2) that such control be ‘direct and immediate,’ and (3) that such control not be ‘limited and routine.’”
“Share or codetermine” comes from a 1964 Supreme Court decision in Boire v. Greyhound Corp. Further, the board contends it used that test until the 1980s, when it introduced three additional requirements, despite a 1981 decision from the U.S. Court of Appeals for the 3rd Circuit affirming the “share or codetermine” formula.
In his dissent, NLRB member Marvin Kaplan – along with other commenters on the rule – contends that safety and health shouldn’t be considered an essential term or condition of employer in the standard.
“These commenters emphasize the role that government regulation plays in setting minimum standards for workplace health and safety, especially in certain industries, including the trucking, food and consumer goods, and waste and recycling industries,” the final rule states. “Other commenters strenuously urge the board to include workplace health and safety as essential. In fact, one commenter suggests that, in light of the COVID-19 pandemic, the board should make explicit that workplace health and safety is an essential condition of all in-person employment.”
In a press release, the U.S. Chamber of Commerce claims the revised rule “will create chaos and more legal confusion that will harm both employers and workers.”
The Chamber adds that the rule “defies common sense to say that businesses can be held liable for workers they don’t employ at workplaces they don’t own or control, yet that is exactly what the new NLRB joint-employer rule does.”