Leap Year: How Did You Spend Your Extra Day? Did You Read the NLRB’s New Joint Employer Rule?

In our busy lives, many people say: “I wish I had more time!” Well, ta-da! Your wish came true! Leap year provided us with one extra day this year! What did you do with your extra day? Did you read up on the NLRB’s new final rule governing joint-employer status? The final rule was issued on February 26, 2020 (just in time for Leap Day!). It is another pendulum swing from the Obama Administration to the Trump Administration. The new rule restores the joint-employer standard that the NLRB applied for years prior to its 2015 Browning-Ferris decision. The NLRB published a Fact Sheet on the final rule which provides an overview of the new joint-employer standard:

  • Specifies that a business is a joint employer of another employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment;
  • Clarifies the list of essential terms and conditions: wages, benefits, hour of work, discharge, discipline, supervision, and direction;
  • Provides that to be a joint employer, a business must possess and exercise such substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees as would warrant a finding that the business meaningfully affects matters relating to the employment relationship;
  • Specifies that evidence of indirect and contractually reserved but never exercised control over essential terms and conditions, and of control over mandatory subjects of bargaining other than essential terms and conditions, is probative of joint-employer status, but only to the extent that it supplements and reinforces evidence of direct and immediate control;
  • Defines the key terms used in the final rule, including what does and does not constitute “substantial direct and immediate control” of each essential employment term;
  • Makes clear that joint-employer status cannot be based solely on indirect influence or a contractual reservation of a right to control that has never been exercised.

You may think, “why would I do this?” “how important is this final rule?” Well, the final rule impacts both unionized and union-free companies. It has significant implications for rights and obligations under the National Labor Relations Act relative to collective bargaining, strike activity, and unfair labor practice liability. Leap Day has passed but there is still time! Add this to your list of to-dos before April 27, 2020, which is the day the final rule will go into effect.