Rather than wait for another case to come before it to address the requirements for joint employer status, the majority of the National Labor Relations Board (NLRB) members have opted to take the little-used rulemaking route. The proposed rule, which was released on September 14, 2018, would amend 29 CFR part 103 to add §103.40, defining joint employers. The proposed definition is only two sentences long:
An employer, as defined by Section 2(2) of the National Labor Relations Act (the 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. A putative 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 remainder of proposed §103.40 consists of 12 examples to assist the reader in identifying joint employers.
The proposed rule is supported by the three Republican Board members but Lauren McFerran, the sole Democrat Board member, wrote a lengthy dissent. She questioned both the substance of the proposed rule and the process itself. She suggests that the Board’s justification for revisiting the Browning Ferris rule is inadequate, the proposed rule is inconsistent with common law and the NLRA and the rulemaking process itself is flawed.
The Board initially attempted to re-establish the pre-Browning Ferris standard in its December 2017 decision in the Hy-Brand case but that decision was pulled when ethical questions were raised about whether one of the Board members should have recused himself from that decision. Similar questions no doubt will be raised as to Board members’ participation in this proposed rule-making.
Comments on the proposed rule are due to the Board by November 13, 2018. Employers with leased employee staffing arrangements or franchisor-franchisee models may want to participate in the comment process in order to ensure that their views are heard.