The National Labor Relations Board (NLRB) has recently adopted a new joint-employer rule that aims to clarify the criteria for establishing joint employer status under the National Labor Relations Act (NLRA). The rule incorporates both reserved and indirect control over essential terms and conditions of employment. In this article, we will delve into the key provisions of the final rule, discuss anticipated challenges and implications, and explore the potential consequences for businesses.
Adoption of the Joint-Employer Rule
The NLRB’s new joint-employer rule explicitly includes reserved and indirect control as factors in determining joint employer status. This means that an entity can be considered a joint employer if it shares or codetermines the employees’ essential terms and conditions of employment, even if it does not exercise direct control over those aspects.
Definition of Joint Employers Under the New Standard
The final rule establishes a new standard for determining joint employer status. It emphasizes the importance of shared or codetermined control over essential employment terms, such as wages, hours, benefits, and hiring decisions. This broader definition expands the scope of potential joint employer relationships under the NLRA.
Grounding the Joint-Employer Standard in Common-Law Agency Principles
The NLRB believes that the new rule will more explicitly ground the joint-employer standard in established common-law agency principles. By aligning with these legal principles, the Board aims to provide a clear and consistent framework for determining joint employer status, ultimately promoting predictability in labor relations.
Shared or Co-determined Essential Terms and Conditions of Employment
Under the new joint-employer rule, an entity can be deemed a joint employer if it has shared or codetermined control over the employees’ essential terms and conditions of employment. This means that decisions regarding wages, hours, benefits, hiring, and other crucial employment aspects can contribute to the determination of joint employer status.
Effective Date of the Rule
The joint-employer rule is scheduled to take effect on December 26, 2023. This gives employers and other stakeholders time to familiarize themselves with the new standard and make any necessary adjustments to their labor relations practices.
Expectations of legal challenges and increased funding for employer organizations
Given the potential impact on labour relations and the changing nature of joint employer standards, it is anticipated that employer-friendly states, employer organizations, and individual businesses may challenge the new rule in court. These legal battles could have far-reaching implications for labor-related regulations and policies. Additionally, stakeholders on both sides of the issue may increase their funding for the 2024 national races, aiming to shape the future of labor laws and regulations.
Alignment with the pro-labour stance of the current administration
The NLRB’s adoption of the new joint-employer rule, with its inclusion of reserved and indirect control, aligns with the consistent pro-labour stance of the current administration. This expansion of the joint employer standard is in line with recent common-law trends and developments, reflecting the administration’s effort to prioritize the interests of workers and unions.
Comparison with the Board’s Browning-Ferris decision
The NLRB contends that the new joint-employer rule effectively codifies the standard established in the Board’s 2015 Browning-Ferris decision. This decision broadened the definition of joint employers by considering indirect control or the right to control employment terms. The new rule builds upon the Browning-Ferris decision, providing more clarity and guidance to employers.
Bargaining Obligations Associated with Joint Employer Status
Joint employer status carries significant consequences for businesses. Once an entity is determined to be a joint employer, it becomes subject to bargaining obligations with the employees affected by the joint employment relationship. This means that businesses may need to negotiate collective bargaining agreements, address grievances, and engage in other labour-related discussions with the employees’ primary employer.
Liability for Unfair Labor Practices Committed by Joint Employers
In addition to bargaining obligations, joint employers can also be held liable for unfair labour practices committed by the primary employer. This expanded liability poses new challenges for businesses, as they must carefully monitor the actions of their joint employer partners and take appropriate preventive measures to avoid legal and reputational consequences.
The National Labor Relations Board’s adoption of the new joint-employer rule represents a significant shift in labor relations standards in the United States. By incorporating reserved and indirect control over essential terms and conditions of employment, the rule brings more clarity and predictability to the determination of joint employer status. However, the anticipated legal challenges, implications, and potential consequences for businesses highlight the ongoing debate and complexities surrounding joint employment relationships. It is crucial for employers to adapt to this new rule, evaluate their relationships with other entities, and ensure compliance with labor laws to mitigate potential risks and liabilities. The future of labor relations and the outcomes of legal battles in courtrooms across the country will undoubtedly shape the interpretation and enforcement of the joint-employer rule in the years to come.