In December 2017, the National Labor Relations Board (NLRB) overruled its 2015 decision in Browning-Ferris Industries, 36 NLRB No.186 (2015). This 2015 decision changed the standard for joint-employer liability, making the definition much broader than previously. The new decision reverts back to NLRB’s previous interpretation of the joint-employer relationship.
Going forward, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine. Therefore, proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship. The NLRB majority concluded that the reinstated standard adheres to the common law and is supported by the NLRA’s policy of promoting stability and predictability in bargaining relationships.