The National Labor Relations Board (NLRB) on Sept. 13 released a proposed rule to establish an updated standard for determining joint-employer status under the National Labor Relations Act. Under the proposal, an employer may be found to be a joint employer of another employer's employees only if it possesses and exercises substantial, direct, and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.
The proposal is positive news for NATSO members and anybody involved in the franchisee/franchisor business. The Obama Administration had sought to broaden the definition of joint employment in order to expose more companies to legal liability for how franchisees, subcontractors, staffing agencies and franchisees treat their employees. A broader standard also makes businesses more susceptible to workforce unionization by imposing new collective bargaining obligations and allowing unions the ability to strike or picket a large corporate entity rather than the individual location where there is a dispute.
The NLRB released a statement saying that the proposed rule reflects the Trump Board's "majority initial view" that the intent of the National Labor Relations Act is "best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer's employees."
In December 2017, the Trump NLRB initially attempted to reverse the Obama Administration's approach, but this effort was vacated for procedural reasons. Thus, the Obama Administration's standard remains the NLRB's standard.
NATSO has been a vocal opponent of the expanded definition of joint employer, and has supported legal and legislative efforts to restore the standard that was in place for more than 30 years. The NLRB's proposal would largely restore this standard.
Comments on the proposal are due on Nov. 14, 2018. NATSO will be submitting comments on the proposal.
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