NLRB Proposes New Joint Employer Rules

In September, the National Labor Relations Board (NLRB) proposed new rules for determining when businesses will be considered joint employers for the purposes of the National Labor Relations Act (NLRA).  Comments on the proposed rules are due November 7th.  The concept of joint employers and the determination of when two entities that do business together will be considered jointly responsible for specific employees has been a big issue over the last decade, not just for the NLRB, but also for the Department of Labor (which is also has the issuance of new joint employer rules on its to-do list).  For the NLRB’s part, the new proposed rules would replace the Trump-era rules which took effect in April 2020 and which substantially narrowed when employers would be considered joint employers for the purposes of the NLRA (which among other things governs issues like unfair labor practices, collective bargaining agreements and protected employment activities).  Under the preexisting rule, a business would only be considered a joint employer if it had “direct and immediate control” over the worker’s essential terms and conditions of employment.  Under the new rule, two businesses would be considered joint employers if they “share or codetermine those matters governing employees' essential terms and conditions of employment.” Under the proposed rules, to “share or codetermine matters” would mean to “possess the authority to control (whether directly, indirectly, or both) or to exercise the power to control (whether directly, indirectly, or both)one or more of the employees’ essential terms and conditions of employment.”  In other words, the new proposed rules (which harken back to the rules that existed before the last set of rules were finalized in 2020) would dramatically expand the circumstances when two businesses could be considered joint employers.  While these rules are still in the proposal stage, businesses that share control of workers should take note and be prepared for upcoming changes and the corresponding increase in the risks associated with sharing such control.