NLRB provides long-awaited clarification of the joint-employer doctrine

On February 26, 2020, the National Labor Relations Board (NLRB) issued a final rule addressing joint-employer status under the National Labor Relations Act (NLRA) (see “NLRB's new 'durable' rule restores old definition of joint employment” for more information). Shifting interpretations of the NLRA aren't uncommon in Board precedent and are greatly influenced by the political leanings of the appointees. According to current Board Chairman John F. Ring, “This final rule gives our joint-employer standard the clarity, stability, and predictability that is essential to any successful labor-management relationship.”

Background

Under a joint-employment theory, one entity may be held responsible for the wrongs of an unrelated entity when they have joint control over employees' terms and conditions of employment. For example, joint-employer liability may be at issue when a business contracts with a staffing company to supplement its workforce. There may also be joint-employer concerns in joint-venture arrangements or franchising situations.

Long-standing NLRB precedent held that to be considered a joint-employer, two entities must “share or codetermine those matters governing the essential terms and conditions of employment,” and indirect control of employment terms was generally deemed to be insufficient for two entities to be deemed joint employers.