In a pivotal move that could constrain collective bargaining among multiple businesses, the National Labor Relations Board (“NLRB”) last week issued its final rule for the joint employer test. It is the final step before the rule becomes effective on April 27, 2020.

The NLRB uses the joint employer test to determine whether a business is an “employer” subject to the NLRA. And it answers the questions of whether a business is required to bargain with a union representing employees that it doesn’t directly employ and whether it can be liable for unfair labor practices that it did not itself apply.

To be a joint employer under the final rule, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees. The essential terms of employment include: wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.

The final rule would restore the standard that pre-existed the 2015 Browning-Ferris decision. Practically, it would allow businesses to organize their contractual relationships with further clarity and would minimize the chance of a business being forced to bargain with a unionized workforce at a partner business with which it has a relationship. To learn more, check out the NLRB’s fact sheet here. https://tinyurl.com/vfqfxz5.

The Department of Labor also issued its final rule for the “joint employer” analysis, which goes into effect on March 16, 2020.