NATSO Comments on Reexamination of Joint Employer Standard

NATSO on Jan. 28 submitted formal comments to the National Labor Relations Board (NLRB) as part of the NLRB's reexamination of the "joint employer" standard. NATSO's testimony supported the NLRB's reexamination of the joint employer standard, which was revised during the Obama Administration to expand the scope of determining "co-employment" under the National Labor Relations Act.  

The joint employer standard is used to determine when two or more employers share responsibility for the essential terms and conditions of employment over a group of employees. Joint employers are required to negotiate with a union representing those employees and are liable for any violations of the National Labor Relations Act committed by either employer. 

Under the expanded “joint employer” standard that the NLRB has proposed to revise, a company could be considered a "joint employer" of an employee, with another company, if it possesses the right to control various terms and conditions of employment, regardless of whether the company actually exercises such control. (The previous standard, which NATSO urged the NLRB to revert back to, required actually exercising control.)

The broadened standard will expose more companies to legal liability for how their subcontractors, staffing agencies and franchisees treat their employees.  The broader standard also makes businesses responsible for providing overtime pay and healthcare benefits to a larger universe of employees, and further makes businesses more susceptible to workforce unionization. 

The NLRB is just one governmental entity reexamining the joint employer standard, and the uncertainty surrounding this body of law is causing tremendous uncertainty and complexity for employers throughout the country. Indeed, from different state laws, to the U.S. Equal Employment Opportunity Commission, the U.S. Department of Labor (which is expected to reexamine its own joint employer standard in the coming months) and the NLRB, each of these bodies and jurisdictions refer to the joint employer doctrine to determine employer liability.  Because they each have different rules as to what establishes joint employment, the employer community is uncertain as to which body of rules to follow in developing its own compliance controls. 

These issues are a specific concern for the travel plaza industry, where the franchisee model is ubiquitous, and where many companies hire "independent contractors" to provide various services (e.g., fuel delivery, infrastructure maintenance, etc.) for their facilities.

As a result, NATSO members that operate in multiple jurisdictions may not be able to use standard or uniform agreements throughout the company, instead having to tailor such contracts to account for different jurisdictional nuances and standards. To mitigate such concerns, NATSO members are advised to consider drafting contracts to specify which company is responsible for working conditions, human resources, pay and benefits and other terms of employment. 

Employees should be trained to act consistently with these agreements -- managers should refrain from directing the work performance of other organizations' employees (such as independent contractors).  

"As representatives of an industry that will be uniquely harmed if the uncertainty surrounding the current, liberal joint employer standard remains in place, NATSO urged the Board to finalize the proposal and return the joint employer standard back to the equitable, efficient and effective rule that had been in place for more than thirty years" before it was revised in 2015, NATSO's Vice President of Government Affairs David Fialkov wrote to the NLRB.

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