USA: NLRB’s Proposed Rule Adopts Pre-Browning-Ferris Joint-Employer Standard

The “Notice of Proposed Rulemaking,” dated September 14, “provides that 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. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.”

The current standard is set forth in Browning-Ferris Industries, 362 NLRB No. 186 (2015). In that case, the NLRB announced a union-friendly joint employer test under which the Board will find two entities are joint employers where one exercises direct or indirect control over the other’s employees, or where one entity has reserved rights of control over the other’s employees, even if unexercised.

Board Chairman John F. Ring and Board Members Marvin E. Kaplan and William J. Emanuel formed the majority in favor of the rule. Board member Lauren McFerran dissented. Ring, Kaplan, and Emanuel were appointed to the NLRB by President Donald Trump; McFerran is an Obama appointee.

A 60-day period for commenting on the proposed rule begins on September 14 and ends on November 13. Comments may be submitted electronically to www.regulations.gov or by mail or hand-delivery.