On September 6, 2022, the National Labor Relations Board delivered a proposal to again revise its standard for determining joint-employer status under the National Labor Relations Act. The proposal largely reestablishes the broad Obama-era standard of joint employment, under which one company may be deemed the joint employer of a second company’s employees not only where it directly or immediately exercises control over the second company’s workforce, but where the first company’s putative control is indirect, or even simply reserved but not ever actually exercised.
In February 2020, the Board promulgated a final rule requiring that joint-employer status may only be established where a company exercises “substantial direct and immediate control” over the essential terms and conditions of another company’s employees. The rule became effective in April 2020, and is the controlling legal standard today. The NLRB’s new proposed rule rejects the 2020 rule’s focus on “direct and immediate control” and largely restores previous “indirect, reserved” control standard.
Given that the proposal is likely to generate significant commentary, the Board’s issuing a final rule before the end of the year appears unlikely. In this article by Littler Mendelson, the potential effects of this proposal are discussed in detail.