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NLRB Proposes Rule To Change Joint-Employer Standard

Volume 17, Issue 19
September 24, 2018

On September 14, 2018, the National Labor Relations Board (NLRB or Board) published a Notice of Proposed Rulemaking regarding its joint-employer standard. The Board has set forth a proposed rule on how it will determine when two or more separate companies are a "joint employer" of employees for purposes of collective bargaining under the National Labor Relations Act (NLRA).

The joint-employer standard is important to nearly all employers who use other companies, vendors, or contractors to assist them with their employees or business or who are in relationship with other companies. For example, the joint-employer standard asks whether a parent and a subsidiary company are truly separate employers or whether they should be considered one employer for purposes of collective bargaining. The joint-employer standard seeks to determine whether a staffing company that provides employees is a joint employer with its customer client, or whether a franchisee's employees are also employees of the franchisor. If a company is found to be a joint employer with another company, both companies will be required to bargain with a union elected by the employees and both will be liable for each other's unfair labor practices.

You may remember that the Board's joint-employer standard was the subject of much litigation and debate during President Obama's term, when the Board issued its controversial decision in Browning-Ferris Industries of California (2015), and during the beginning of President Trump's term when the Board overruled Browning-Ferris in Hy-Brand Industrial Contractors, Ltd. (2017). Hy-Brand was vacated after it was determined that Board Member Emanuel should have been disqualified from participating in that decision. The newly proposed rule represents the Board's second attempt to change Browning-Ferris.

Employers with potential joint-employer liability should review the proposed rule and consider offering comments to the Board. If you have questions about the rule or would like assistance with submitting public comments, please contact a KZA attorney. Public comments are due by November 20, 2018.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.