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The chairman of the National Labor Relations Board (NLRB) on June 5 confirmed that the agency intends to proceed with a rulemaking under the Administrative Procedures Act (APA) to settle the much-debated definition of joint employment under the National Labor Relations Act. In a letter addressed to Senators Elizabeth Warren, Kirsten Gillibrand, and Bernie Sanders, NLRB Chairman John Ring wrote, “[c]andor 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.”
The move to engage in a so-called notice-and-comment rulemaking under the APA is the latest turn in the joint employer saga. As observers of labor policy know well, this saga began when the Obama-era NLRB issued its 2015 decision in Browning-Ferris Industries, in which the Board upended decades of precedent to rewrite the standard for establishing joint employment.
Browning-Ferris jettisoned a clear, direct-control standard and replaced it with a sweeping standard based on “indirect” control or even the “potential” to control — ensnaring all manner of businesses in potential legal liability. Put simply, the decision was part of the Obama NLRB’s aggressive agenda to promote union organizing.
In the fall of 2017, the Trump administration had a brief window in which it held a majority of Board members, and that majority reversed Browning-Ferris on December 14. In Hy-Brand Industrial Contractors, Ltd., the Board restored the direct and immediate control standard for joint employment, and it slammed the seriously misguided Browning-Ferris decision, saying that “standard is a distortion of common law as interpreted by the Board and the courts, it is contrary to the Act, it is ill-advised as a matter of policy, and its application would prevent the Board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations.”
Unfortunately, the Board then vacated the Hy-Brand decision in February 2018 for procedural reasons, which restored the Browning-Ferris standard. Meanwhile, political opponents of the current majority cast aspersions on Member William Emmanuel and made dubious claims about his involvement in addressing the joint employer issue at all.
With all of the political argy-bargy seemingly here to stay, the NLRB announced on May 9 that the current majority on the Board was considering a rulemaking, which would provide the public with the opportunity to weigh in on this issue.
In his letter on June 5 Chairman Ring reiterated that “a majority of the Board believes that ‘notice-and-comment’ rulemaking offers the best vehicle to fully consider all views on what the [joint-employer] standard ought to be.’” He further opined that “rulemaking will enable the Board to address ‘specific factual circumstances’ hypothetically and thus to furnish unions and employers the guidance that Browning-Ferris conspicuously failed to provide.”
As Chairman Ring noted, the joint employer issue “has been and continues to be a hotly debated subject” within the labor policy community. One hopes that a rulemaking will put an end to the debate and finally deliver the much-needed clarity that employers have sought all along.