Joint-Employer Standard Could Expand NLRB’s Reach

On May 12, 2014, the National Labor Relations Board (NLRB) solicited amicus briefs regarding a potential modification to the Board’s 30-year-old joint-employer standard. The Democratic majority on the board has made it clear that it intends to vigorously defend the rights afforded to employees under the National Labor Relations Act (NLRA) which they believe have been eroded through conservative-era jurisprudence.

The Current Joint-Employer Standard

The existing 30-year-old standard states that in order to determine whether two entities are really a joint employer under the Act requires an analysis of whether they share the ability to directly and immediately control or co-determine essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.

Where the Joint-Employer Status Comes Into Play

For the purposes of NLRB, nontraditional workers, such as independent contractors, do not have the right to unionize. However, temporary service providers such as staffing agencies and client employers, may be found to be “joint employers” of the temporary employees. If joint employer status is found, both parties could be held liable for violations of NLRA related to unlawful discipline or discharge of a temporary employee. Also, when temporary employees are represented by a union, a finding of joint employer status can subject the client employer to collective bargaining obligations under the NLRA. As such, employers tend to try and avoid joint employer status.

What Lies Ahead

It is largely anticipated that the NRLB is seeking to lower the threshold for establishing joint employer status. The result would be an increase in the amount of employees eligible to vote in elections and a simultaneous increase in the amount of employers who are subject to bargaining obligations and unfair labor practice violations.

Lowering the bar on joint-employer determinations will also likely disrupt long-standing business relationships such as:

• the relationships between owners and contractors who employ operators and subcontractors, respectively, to provide workers and services in heavily unionized industries, including hospitality, construction, cleaning and transportation.

• businesses involved in joint-ventures with other employers, using staffing agencies to supply workers, hiring subcontractors to perform work, leasing space at its facilities to concessionaires, or even in the position as franchisor to franchisee might, under a new joint-employer standard, find themselves required to bargain with a union over the employment terms of workers they see as employed by someone else, depending solely on whether the NLRB concludes that doing so is “necessary … to meaningful collective bargaining.”

Amicus briefs must be filed by June 26, 2014.