Partisan clash continues over what defines a ‘joint employer’

Washington — Federal lawmakers are divided down party lines over a proposed rule from the National Labor Relations Board that would restore the board’s previous definition of “joint employer.”

As outlined in a notice of proposed rulemaking published in the Sept. 7 Federal Register, NLRB is seeking to define “essential terms and conditions” to include workplace safety and health, along with wages, benefits and other compensation; hours of work and scheduling; hiring and discharge; discipline; supervision; assignment; and work rules and directions governing the manner, means or methods of work performance.

In a letter dated Dec. 7 and addressed to NLRB Chair Lauren McFerran, Rep. Virginia Foxx (R-NC), ranking member of the House Education and Labor Committee, opposes the proposal.

“The rule is inconsistent with common law, circumvents congressional authority, and will negatively impact the nation’s economy and our constituents,” states the letter, which is co-signed by 42 Republican senators and 23 other Republican members of the House.

In a separate letter addressed to NLRB Executive Secretary Roxanne Rothschild and also dated Dec. 7, Rep. Bobby Scott (D-VA), chair of the House Education and Labor Committee, backs the proposed rule. That letter is co-signed by 52 other House Democrats.

“The question of whether a company is a joint employer significantly impacts workers’ rights under the [National Labor Relations Act of 1935], especially those workers employed by a temporary staffing agency, subcontractor or other employment intermediary,” they write.

The proposed rule is another chapter in a recent tug-of-war over what constitutes a “joint employer,” which began in August 2015. That’s when NLRB ruled that Browning-Ferris Industries of California and contractor Leadpoint Business Services were joint employers. That decision stemmed from a 2013 dispute between the companies and Sanitary Truck Drivers and Helpers Local 350, part of the International Brotherhood of Teamsters, which sought to represent Leadpoint’s recycling workers.

NLRB used the decision to rule that joint employers are those who “share or codetermine those matters governing the essential terms and conditions of employment.”

NLRB says “share or codetermine” stems from a 1964 Supreme Court decision in Boire v. Greyhound Corp. Further, the board contends it used that test until the 1980s, when it introduced three additional requirements, despite a 1981 decision from the U.S. Court of Appeals for the 3rd Circuit affirming the “share or codetermine” formula.

The 1980s-era NLRB required that joint employers “(1) ‘actually’ exercise control, (2) that such control be ‘direct and immediate,’ and (3) that such control not be ‘limited and routine.’”

In 2017, the board, under Republican control, went back to this test and overruled the 2015 decision. Three years later, NLRB put forth a regulation using the stricter test for joint employers. The decision to put forth the proposed rule was a 3-2 party-line vote, with McFerran, David Prouty and Gwynne Wilcox in favor.

“In an economy where employment relationships are increasingly complex, the board must ensure that its legal rules for deciding which employers should engage in collective bargaining serve the goals of the National Labor Relations Act,” McFerran said in a press release. “Part of that task is providing a clear standard for defining joint employment that is consistent with controlling law. Unfortunately, the board’s joint employer standard has been subject to a great deal of uncertainty and litigation in recent years. Rulemaking on this issue allows for valuable input from members of the public that will help the board in its effort to bring clarity and certainty to these significant questions.”

In their dissent, which is included in the NPRM, board members Marvin Kaplan and John Ring contend the proposal would go beyond the limits of common law and wouldn’t provide “any real guidance to the regulated community.”

They add: “The proposed rule substitutes an open-ended, nonexclusive list of essential terms and conditions of employment for the closed list set forth in the 2020 rule. This open-ended list renders the proposed rule impermissibly vague and, therefore, arbitrary and capricious.”