On September 13, 2018, the National Labor Relations Board (NLRB) announced its new proposed rule regarding its joint employer standard. It provides that an employer may be determined a “joint employer” of another employer’s employees:

1) if the first employer “possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment” of the other employer’s employees; and
2) the control is executed in a manner that is not limited and routine. This proposed rule is not effective yet and may be subject to revision or revocation before becoming final.

Under current NLRB law, specifically, Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), an employer can be considered a joint employer with another entity if it exercises limited and routine indirect control over another entity’s employees. Under the current rule, an employer is also considered a joint employer even if the employer simply contractually reserved authority to exercise control over another entity’s employees, but never actually exercised it. This current, broader joint employer definition is significant because being a joint employer may require an employer to collectively bargain with its joint employer’s employees. And that can make an employer liable for unfair labor practices perpetrated by its joint employer.

The NLRB has submitted the proposed rule to the Federal Register for comment. Now, employers and other interested parties may submit comments on the proposed rule within 60 days from its publication. The NLRB will then have an opportunity to review the comments and make a final rule. If adopted, the NLRB’s proposed joint employer rule would significantly limit the joint employer definition, and consequently, employers’ potential collective bargaining obligations and liability.