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NLRB’s Proposed New Joint Employer Rule Would Walk Back Scope of Browning-Ferris Decision

On September 14, the National Labor Relations Board (“Board”) issued a proposed new joint-employer rule. The proposed rule walks back the expanded scope of the Obama-era Board’s 2015 Browning-Ferris decision, which held that an employer’s potential or indirect control over a separate employer’s employees could establish joint-employer status. The Browning-Ferris decision ignored decades of Board precedent and has been controversial since being issued. Although this move has been expected, the proposed rule marks a much-welcomed return to the pre-Browning-Ferris standard for determining joint-employer status.

The Board’s newly-proposed joint-employer rule provides that “[a]n employer, as defined by Section 2(2) of the National Labor Relations Act, may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.”

In a clear reversal of Browning-Ferris, the proposed rule also requires that a joint employer “must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”

The proposed rule makes it clear that the Board is returning to its pre-Browning-Ferris joint-employer standard, as it provides that the Board is “presently inclined to find, consistent with prior Board cases, that even a putative joint employer’s ‘direct and immediate’ control over employment terms may not give rise to a joint-employer relationship when that control is too limited in scope.”

The Board’s proposed rule provides employers greater clarity, certainty, and consistency in predicting whether its actions potentially establish joint-employer status. This proposed rule should allow employers to better examine their practices and policies and allow them to take steps to avoid being deemed a joint-employer of employees not under their direct control.

For additional information on the joint-employer standard or any related topic, please attorney Nick Golding at ngolding@KDDK.com or (812) 423-3183, or contact a member of the KDDK Labor and Employment Law Practice Team.

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