NLRB Confirms Forthcoming Rulemaking on Joint-Employer Standard

June 6, 2018

In a letter sent this week to Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Kirsten Gillibrand (D-NY), National Labor Relations Board (NLRB) Chairman John Ring confirmed that the Board will issue a Notice of Proposed Rulemaking this summer on the joint-employer standard.

“Your letter references that the NLRB may engage in rulemaking on the joint-employer subject,” Ring said in the letter. “Candor requires me to inform you that the NLRB is no longer merely considering joint-employer rulemaking. A majority of the Board is committed to engage in rulemaking, and the NLRB will do so.”

Ring pointed out to the Senators that a rulemaking is the most appropriate vehicle because cases are often limited to their facts. Additionally, he said standards implemented through a case can be applied retroactively or prospectively, but new, final rules may only be applied moving forward. This provides certainty to employers.

Finally, Mr. Ring noted that the rulemaking process would eliminate any potential conflict of interest issues or potential recusals as prior clients or employers would not be directly involved in potential cases addressing the matter.
The rulemaking confirmation is significant as the standard has been unsettled for months as the NLRB overturned the Browning-Ferris decision in December 2017; however, subsequently tossed the decision that overturned Browning-Ferris because of a conflict of interest in the case.

Under the current standard adopted by the NLRB during the Obama era, there is a much lower threshold to establish “joint-employer” status. The inquiry centers on whether a putative joint employer has authority – even indirect authority – to control essential terms and conditions of employment. That current “indirect control” standard has blurred the dividing line.