The National Labor Relations Board (NLRB) on September 6 issued a Notice of Proposed Rulemaking (NPRM) proposing to rewrite its standard for determining joint employment under the National Labor Relations Act (NLRA). This proposal would reverse a rulemaking on the same topic promulgated just over two and a half years ago and covers numerous commonplace business relationships that traditionally have not been considered joint employment, a legal situation in which two or more employers control the work or working conditions of the same employees.

More importantly, the NLRB proposal threatens to entangle countless franchise businesses, government contractors, and any companies with significant supply chain relationships if they can exercise some degree of influence over working conditions of another business’s employees. For those employers—not to mention their employees—that could mean negotiating with a labor union to reach a collective bargaining agreement involving multiple entities, which could spell disaster for them and potentially wider economic upheaval.

During the Obama administration, the Democratic majority at the NLRB first attempted to implement this expansive joint employer liability standard in its misguided 2015 Browning-Ferris (BFI) decision, which upended longstanding precedent. Until that decision, the NLRB had held that a putative joint employer must exercise direct and immediate control over the terms and conditions of employment. Under BFI, indirect or...

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