New NLRB final rule on joint employer status reinstates the 2020 standard

In the latest chapter of the National Labor Relations Board’s (NLRB) attempts to define “joint employer” status, in late February, the Board issued a final rule that formally withdraws the Biden-era 2023 joint employer rule and reinstates the narrower 2020 standard for determining joint employer status under the National Labor Relations Act (NLRA). The final rule is effective immediately. It’s widely believed that a new, similar but not identical rule will be drafted to address existing judicial critiques of the 2020 rule. 

Disjointed recent history of NLRB’s joint employer rule 

Early in the first Trump administration, the Board issued a final rule that required companies to “possess and exercise substantial direct and immediate control” over essential terms and conditions of employment before a joint employer relationship could be established. The mere existence of reserved joint control or unexercised indirect control would not establish a joint employer relationship. 

In 2023, the Biden Board published a new final rule, which rescinded the 2020 rule and adopted a significantly broader standard. Most controversially, the new rule regarded indirect controls—even if unexercised or contingent—as indicia of joint employment. On March 8, 2024, a federal court vacated the 2023 rule before it ever went into effect and reinstated the 2020 rule. The newly issued final rule seeks to end the existing legal uncertainty. 

2020 joint employer rule reinstated— but will be modified