National Labor Relations Board Issues Final Joint Employer Rule: Addressing Indirect Control and Union Relations

On October 26, the National Labor Relations Board (NLRB) published its long-awaited final joint employer rule after initially publishing the revised rule for public comment in September 2022. This article delves into the key details of the new rule, its implications for employers, and the expected impact on the business landscape.

Explanation of the New Rule

The new rule replaces the regulations issued by the NLRB in 2020. Unlike the previous regulations, the revised rule considers evidence not only of direct control exercised by employers but also indirect control that is reserved by an employer. This shift expands the scope of what qualifies as a joint employer relationship, potentially affecting businesses in various industries.

Implications for Employers

Under this employee- and union-friendly rule, a company now risks being classified as the employer of workers over whom it does not exercise direct control but could theoretically and contractually. Consequently, if these employees unionize, the company may be obligated to engage in collective bargaining. Additionally, a joint employer could face liability for unfair labor practices committed by another business entity.

Historical Shifts in the NLRB’s View

Over the years, the NLRB’s interpretation of joint employer relationships has evolved, with the focus centering around the type and level of control exerted by an employer over another company’s workforce. The new rule draws inspiration from the Board’s Obama-era “Browning Ferris” rule, reversing prior changes and returning to a broader definition of joint employment.

Key Features of the Rule

The revised rule includes an exhaustive list of seven categories of workplace terms and conditions of employment that trigger the joint employer rule. These categories make the employer a party that exercises or has the potential to exercise control over areas such as wages, benefits, hours of work, hiring, and more. The rule places significant emphasis on indirect control and the mere right to control, rather than actual exercise of control.

Expected Impact on Employers

Given that indirect control and the contractual right to control significant working conditions are sufficient for the NLRB to establish a joint employer relationship, the new rule is expected to have wide-ranging implications for employers. Businesses that engage in staffing agreements or other arrangements where one party has rights to assert over the employees of the other party should immediately seek legal review of their agreements to ensure compliance with the revised rule.

Addressing Union Organizing and Employee Relations

In recent times, union organizing has reached historic highs, and NLRB developments have made it easier for unions to be certified without the necessity of winning an election. In light of these shifts, it becomes crucial for employers to work closely with experienced labor counsel to enact proactive employee relations measures. By ensuring employees are satisfied with their working conditions and environment, businesses can minimize the likelihood of their workforce seeking union representation.

The National Labor Relations Board’s final joint employer rule introduces significant changes to the framework governing joint employment relationships. By expanding the definition of joint employers to include those with indirect control and contractual potential, the rule places heightened obligations on businesses and raises potential liability concerns. Companies should prioritize reviewing their agreements and implementing proactive employee relations strategies to navigate these developments successfully and safeguard their operations. With a comprehensive understanding of the new joint employer rule, employers can adapt their practices to maintain compliance and foster positive labor relations in evolving times.

Explore more

Trend Analysis: Employee Ownership Models

Imagine a workforce where the majority dreads Monday mornings, feeling trapped in roles that offer neither fulfillment nor fair reward— a staggering 60% of American workers lack what experts define as a “quality job.” This widespread discontent, marked by inadequate pay, limited growth, and a lack of voice in decisions, paints a grim picture of the modern workplace. Yet, amid

Trend Analysis: Financial Strain in Job Searches

Imagine preparing for a dream job interview, only to realize the cost of getting there—travel, a new outfit, childcare—could drain a significant chunk of savings before even stepping into the room. This hidden financial toll is becoming a harsh reality for countless job seekers in today’s competitive market. The journey to secure employment, once considered a straightforward path, has morphed

Trend Analysis: AI and CRM System Integration

Imagine a customer dialing a helpline, expecting swift, personalized service, only to be met with a chatbot that doesn’t recognize their history, forcing them to repeat their issue for the third time. Artificial Intelligence (AI) is revolutionizing how businesses interact with customers, promising seamless experiences and predictive insights. Yet, without proper integration into Customer Relationship Management (CRM) systems, these advancements

How Will Digital Marketing Trends Shape 2026 Brand Success?

Imagine a world where a single search query paints a vivid, interactive canvas of ideas, where brands aren’t just selling products but co-creating stories with their audiences, and where nostalgia blends seamlessly with cutting-edge tech to capture hearts. This isn’t a distant dream—it’s the digital marketing landscape poised for 2026, a horizon where technology and human emotion collide with unprecedented

Trend Analysis: Digital Transformation in Aviation

Imagine a scenario where a single software glitch grounds an entire fleet of aircraft, costing millions in losses and stranding thousands of passengers—a stark reality faced by the aviation industry during the Boeing 737 MAX 9 crisis in early 2024. This incident exposed the fragility of relying on outdated systems in an era where technology moves at breakneck speed. Digital