Employers and others interested in influencing a new rule on what constitutes joint employment have another month to make their thoughts known on the issue. The National Labor Relations Board (NLRB) announced on December 10 that the comment period for the proposed rule was being extended to January 14, 2019.
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This marks the second extension of the rule’s comment period. The Board originally set a 60-day comment period when it announced it would publish a Notice of Proposed Rulemaking (NPRM) on September 13, 2018. Then a new deadline of December 13, 2018, was announced in October. The deadline is now set for January 14 with comments in reply to comments submitted during the initial comment period being due by January 22.
Although the NLRB didn’t give a reason for the extension, it likely indicates the Board is receiving a lot of feedback on its proposed rule, according to Brian Garrison, an attorney with the Faegre Baker Daniels LLP law firm in Indianapolis, Indiana.
The proposed rule is seen as a return to a more employer-friendly definition of joint employment than is currently the standard. The joint-employment standard has gone back and forth in recent years between the old employer-friendly standard and the employee-friendly standard set in a case involving Browning-Ferris Industries of California. That 2015 decision—set when the Board had a Democratic majority—created a standard in which an employer can be deemed a joint employer of another employer’s employees if it exercises even indirect control over the workers.
Then in December 2017—when the NLRB had a Republican majority—the Board returned to the old, more employer-friendly standard in a case involving Hy-Brand Industrial Contractors, Ltd. Under the Hy-Brand standard, an employer would have to exercise direct control over another employer’s employees to be considered a joint employer.
The Hy-Brand standard, however, was short-lived. The NLRB vacated that decision in February 2018 after conflict-of-interest accusations against Republican Board Member William J. Emanuel arose over his former law firm’s involvement in the Browning-Ferris case.
Rule’s Contents
After vacating Hy-Brand, the NLRB announced it would settle the issue through rulemaking instead of the customary adjudication process, an unusual move for the Board, Garrison says. The Board published its NPRM on September 14, 2018.
When the NLRB announced the NPRM, it said that under the proposed rule “an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.”
The NLRB’s announcement also said that under the rule, “Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.”
Cautions for Employers
Garrison reminds employers that while the issue remains unsettled, the Browning-Ferris standard rules. Even after an NLRB rule eventually becomes final, it is likely to be challenged through litigation. Garrison says groups associated with organized labor may challenge the final rule, possibly questioning the way it was enacted or even whether the Board had the authority to make a rule.
Garrison also emphasizes that employers need to remember that the NLRB’s action addresses only one source of potential joint-employer liability. Other agencies, such as the IRS, and various laws, such as the Fair Labor Standards Act and the Family and Medical Leave Act, also address joint-employer liability.
To Comment
The NLRB’s announcement says public comments are invited on all aspects of the proposed rule and should be submitted either electronically to www.regulations.gov or by mail or hand-delivery to Roxanne Rothschild, the Board’s acting executive secretary, at 1015 Half St. S.E., Washington, D.C. 20570-0001.
Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications.