Coalition Files Petition for Joint Employer Rulemaking

Jun 19, 2018 - 11:00am

Executive Director, Labor Policy

A broad coalition of trade associations and other industry groups, including the U.S. Chamber, on June 13 filed a petition with the National Labor Relations Board (NLRB) asking the agency to engage in a rulemaking to define joint employment under the National Labor Relations Act (NLRA).  The petition asks the Board to engage in the rulemaking process “in order to realign the Board’s joint-employer test with Congress’s intent under the [NLRA].”

 

A rulemaking under the Administrative Procedures Act would help put an end to the nearly three year debate over the Obama-era NLRB’s decision to radically alter its standard for determining joint employment in its 2015 Browning-Ferris decision.  That errant decision rewrote the Board’s previously straightforward “direct and immediate control test” and replaced it with a sweeping standard based on “indirect” control or even the “potential” to control, which exposed countless businesses to potential legal liability where it had not previously existed.

 

Since that decision, the business community has been steadfast in its opposition to the NLRB’s overreach on this issue, and another coalition of organizations has worked to enact legislation that would ameliorate the situation by enshrining the previous joint employer standard by way of the Save Local Business Act, which the House passed in November. However, to date that and other legislative proposals are stalled in Congress. 

 

Meanwhile, the current NLRB so far has not succeeded in overturning the Browning-Ferris standard either. With a brief window in which they held a majority last fall, the Republican Board members voted to reverse Browning-Ferris in Hy-Brand Industrial Contractors, Ltd.. Unfortunately, the Board then vacated the Hy-Brand decision several weeks later in February 2018 for procedural reasons, and that restored the Browning-Ferris standard. 

 

Political opponents of reversing the Browning-Ferrris joint employer standard have likewise been steadfast in their criticism of the current Board’s efforts.  On May 9, the NLRB announced that it was considering a rulemaking to address the issue, which prompted a letter from Senators Warren, Sanders, and Gillibrand “to express strong concerns” about such a rulemaking. 

 

Their letter raised several dubious objections to the prospect of a regulatory fix and faulted Chairman John Ring for tweeting the fairly obvious observation that “uncertainty over the standard undermines job creation & economic expansion,” which is exactly what the business community has been saying all along.   

 

As this blog reported, Chairman Ring responded with a letter of his own in which he politely dismissed the senators’ concerns and confirmed that the majority of the NLRB is in favor of pursuing a rulemaking as early as this summer.

 

Notwithstanding Ring’s announcement, the coalition that filed its petition last week makes clear that the business community continues to believe the joint employer issue is one of significant concern.  Petitioning the Board for a rulemaking underscores the point, and one hopes the NLRB will take the opportunity to put an end to the debate and finally deliver the much-needed clarity employers have been seeking. 

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Executive Director, Labor Policy