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NLRB Posed to Alter Joint Employer Standard in September

The NLRB has been considering changing the Joint Employer standard since it announced its regulatory agenda in December 2021. It appears the NLRB will finally do this in September through the rulemaking process. By altering the joint-employer definition, the likelihood of a joint employment finding will significantly increase.

The current standard for “joint employer” status was established by the NLRB in 2020. Under the current standard,

An employer… may be considered a joint employer of a separate employer’s employees only if the two employers share or co-determine the employees’ essential terms and conditions of employment. To establish that an entity shares or codetermines the essential terms and conditions of another employer’s employees, the entity must possess and exercise such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees.

According to the 2020 Rule, employers must possess and exercise control over the employee. Now, the NLRB wants to amend the definition to only require employers possess control in order to be considered a joint employer. The shift in the definition will leave many employers on the hook, even if they do not exercise control over the employees.

The last time the Board tried to enforce such a broad joint employer definition lead to a seven litigation involving McDonald’s and its franchisees.  Only time will tell who the next target will be.  We will continue to monitor and report on developments regarding the NLRB rulemaking.

Brody and Associates regularly advises management on all issues involving unions, staying union-free, complying with the newest decision issued by the NLRB, and training management on how to deal with all these challenges.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.