NLRB Finalizes Rule Broadening Joint-Employer Test
October 26, 2023
On October 26, 2023, the National Labor Relations Board (“NLRB”) issued a widely anticipated rule which broadens the joint-employer test, thereby making it easier for employees of franchisees and staffing agencies to show that the franchisor or agency is their joint employer and bring them to the bargaining table. The NLRB’s press release may be found here, and the final rule may be accessed here.
Over the last several years, the joint-employer rule has swung back and forth between administrations. In 2015, the NLRB issued its decision in Browning-Ferris which stated an entity may be a joint employer even if it has only reserved or indirect control over workers. In December 2017, Browning-Ferris was overturned by the Board’s decision in Hy-Brand Industrial Contractors, and the NLRB made a return to the pre-2015 test, which essentially stated that two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees and has done so directly and immediately in a manner that is not limited and routine. Only two months later, the Board vacated the Hy-Brand decision due to ethical concerns and questions regarding Member William Emanuel’s participation in the decision, and reinstated the Browning-Ferris standard. Then, in 2020, the NLRB revealed a finalized rule which returned to the pre-Browning-Ferris rule and said that a business would be a joint employer only if it had “substantial direct and immediate control” over another business’s workers.
Under the new standard, a business may be considered a joint employer if each entity has an employment relationship with the employees, and they share or codetermine one or more of the essential terms of employment, which the Board defined exclusively as: “(1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.” The rule is set to be published Friday, October 27, 2023, and will then take effect 60 days later, on December 26.
To keep up-to-date on developments in the labor field, please contact a member of the Jackson Kelly PLLC Labor and Employment Team.