In an anticipated move, the National Labor Relations Board (the “NLRB”) formally reinstated its 2020 rule that controls when an employer is deemed a joint employer under the labor law. This rulemaking does not change the standard that the NLRB currently applies to determine joint employer status because of prior litigation before a federal judge. However, the rulemaking may settle—at least for the near future— a tumultuous history for the NLRB’s joint employer standard, which has been the subject of longstanding litigation and repeated attempts at rulemaking.
Under the National Labor Relations Act, “joint employment” refers to a situation where two or more separate entities allegedly codetermine employees’ terms and conditions of employment, such as decisions about hiring, firing, disciplining, supervising, and directing employees. This issue typically arises in the context of contractor/subcontractor relationships, entities that engage temporary staff, parents/subsidiaries and franchisor/franchisee situations. If a company is deemed to be a joint employer of certain employees, it will share labor-law liability and the duty to bargain with the unions representing those employees.
In 2020, the NLRB during the first Trump administration initiated rulemaking to overturn the joint-employer standard established by the Obama administration in Browning-Ferris Industries of California, Inc., 362 NLRB 1599 (2015).
In October 2023, the NLRB issued a new joint-employer...
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