[ The National Labor Relations Board has issued a new rule on
defining joint employers (like McDonalds), overturning the Trump Board
rule.]
[[link removed]]

NLRB ISSUES NEW JOINT EMPLOYER RULES  
[[link removed]]


 

National Labor Relations Board
October 27, 2023
NLRB
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

_ The National Labor Relations Board has issued a new rule on
defining joint employers (like McDonalds), overturning the Trump Board
rule. _

, NLRB

 

NLRB Joint-Employer Standard – 2023 Final Rule
(Effective 12/26/2023)

On October 27, 2023, the NLRB published a final rule addressing the
Standard for
Determining Joint-Employer Status.

The final rule establishes that, under the National Labor Relations
Act, two or more entities
may be considered joint employers of a group of employees if each
entity has an
employment relationship with the employees, and if the entities share
or codetermine one or
more of the employees’ essential terms and conditions of employment.

HOW DOES THE 2023 STANDARD DIFFER FROM THE 2020 STANDARD?

The final rule rescinds and replaces the 2020 final rule that was
promulgated by the prior
Board and which took effect on April 27, 2020.

The 2023 rule more faithfully grounds the joint-employer standard in
established common-
law agency principles. In particular, the 2023 rule considers the
alleged joint employers’
authority to control essential terms and conditions of employment,
whether or not such
control is exercised, and without regard to whether any such exercise
of control is direct or
indirect. The common law clearly recognizes that reserved control and
indirect control are
relevant to the analysis.

By contrast, the 2020 rule made it easier for actual joint employers
to avoid a finding of
joint-employer status because it set a higher threshold of
“substantial direct and immediate
control” over essential terms of conditions of employment, which has
no foundation in
common law.

WHAT ARE ESSENTIAL TERMS & CONDITIONS OF EMPLOYMENT UNDER THE FINAL
RULE?

Essential terms and conditions of employment are defined 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 joint-employer standard is only implicated if an entity employs
the workers at issue and
has authority to control at least one of these terms or conditions.
Authority over other
matters is not sufficient.

WHY DOES THE STANDARD INCLUDE RESERVED CONTROL?

The standard’s inclusion of reserved control is grounded in the
common law. Including
reserved control is important to account for situations in which an
alleged joint employer
maintains authority to control essential terms and conditions of
employment but has not yet
exercised such control.

The reality is that an entity holding such control may step in at any
moment to affect
essential terms. Indeed, even when the entity remains on the
sidelines, it may cast a
shadow over the other employer’s decision-making with respect to
such terms.
Why does the standard include indirect control?

Section 2(2) of the National Labor Relations Act defines
“employer” to include “any person
acting as an agent of an employer, directly or indirectly.” By
including indirect control in the
joint-employer standard, the final rule accounts for control exercised
through an
intermediary or controlled third parties. Indirect control is also a
well-established common-
law consideration.

Considering indirect control prevents an entity that has an employment
relationship with
employees from avoiding joint-employer status—and the bargaining
obligation that goes
with it—by using an intermediary to implement decisions about
essential terms and
conditions of employment.

WHAT DOES A JOINT EMPLOYER HAVE TO BARGAIN OVER?

For the purposes of collective bargaining, once an entity is deemed a
joint employer by
virtue of its control over one or more essential terms and conditions
of employment, it will be
required to bargain over those particular essential terms and
conditions as well as all other
mandatory subjects of bargaining that it possesses or exercises the
authority to control. It
will not be required to bargain over subjects that it does not have
authority to control.

HOW DOES THE 2023 STANDARD COMPARE TO THE 2015 BROWNING-FERRIS
DECISION?

The 2023 standard significantly resembles the 2015 standard
established by the Board’s
Browning-Ferris decision, which was endorsed in all major respects by
the United States
Court of Appeals for the District of Columbia Circuit.

But the new final rule also provides extensive guidance to parties
regarding their rights and
responsibilities when more than one statutory employer employs
particular workers and
controls (or has authority to control) one or more of their essential
terms and conditions of
employment. It also makes clear that an employer must control (or have
authority to control)
one or more of a specific and limited list of essential terms and
conditions of employment to
give rise to a joint employment relationship.

WHY DID THE BOARD USE RULEMAKING TO CHANGE THE JOINT-EMPLOYER
STANDARD?

The Board has rulemaking authority under Section 6 of the NLRA.
Although the Board
usually sets standards through adjudication rather than rulemaking,
the Board is changing a
standard set by a previous 2020 rulemaking, which cannot be undone by
adjudication.
Rulemaking also provides better opportunity for public comment.

DID THE BOARD CONSIDER SMALL BUSINESSES DURING THE RULEMAKING PROCESS?

Yes. The Board conducted the required small business analysis under
the Regulatory
Flexibility Act. In addition, Board staff voluntarily participated in
an October 2022 small
business roundtable convened by the Small Business Administration’s
Office of Advocacy.
The Board also extended the public comment period from the required 30
days to three
months to ensure sufficient time for all stakeholders and considered
and responded to
comments from all stakeholders, including the small business
community.

How does the new standard affect particular kinds of businesses (e.g.
franchises, temp agencies, staffing firms, etc.)?

The nature of the business-to-business relationship is incidental to
the analysis established
by the final rule. So, not all franchisors and their franchisees will
be joint employers. Nor will
all staffing or temporary agencies and their client employers.

Rather, regardless of the business model, the joint-employer analysis
is driven by the
alleged joint employers’ relationship with the employees in question
and their authority to
control one or more of the employees’ essential terms and conditions
of employment.
The bottom line is that, while the final rule establishes a uniform
joint-employer standard,
the Board will still have to conduct a fact-specific analysis on a
case-by-case basis to
determine whether two or more employers meet the standard.

HOW DOES THIS COMPARE TO THE DEPARTMENT OF LABOR RULE?

The Board’s final rule is completely separate from the DOL rule. The
Board and DOL
independently set joint-employer standards, consistent with their
different governing
statutes. The Board’s rule is thus grounded in the NLRA and
longstanding common-law
principles. By contrast, the DOL applies an economic-realities test to
interpret “employer” for
the purposes of the Federal Labor Standards Act. The Board does not
use the economic-
realities test.

WHAT HAVE FEDERAL COURTS SAID ON THE JOINT-EMPLOYER STANDARD?

Decades of federal court decisions have reaffirmed the use of
common-law principles in
determining joint-employer status. In 2018, the DC Circuit broadly
upheld the Board’s 2015
Browning-Ferris standard, which is the foundation for the 2023 final
rule. The court deemed
“fully consistent with the common law” the Board’s determination
that “both reserved
authority to control and indirect control can be relevant factors in
the joint-employer
analysis.”

After the prior Board promulgated the 2020 standard, the Agency was
sued in federal
district court over that rule. That lawsuit has been held in abeyance
while the Board
considered a new rule.

WHEN DOES THE NEW STANDARD TAKE EFFECT?

The effective date is December 26, 2023. The new standard will only be
applied to cases
filed after the effective date

* NLRB
[[link removed]]
* Joint Employers
[[link removed]]

*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web
[[link removed]]

Submit via email
Frequently asked questions
[[link removed]]

Manage subscription
[[link removed]]

Visit xxxxxx.org
[[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]