Joint Employer Standard Under Review by National Labor Relations Board

June 14, 2018

As you will recall, in 2015-2016 the Obama NLRB reversed a decades-old standard by which an employer could be considered a “joint employer” for purposes of union organizing, workplace violations, etc., only if that employer exercised “direct control” over the employees involved.   Under the Obama-Board’s standard an employer would be considered a “joint employer” if it exercised only “indirect” control over the employees.  This was widely referred to as the McDonalds issue, as the new standard would have made McDonalds a joint employer with its franchisees even though the corporation exercised very little control over the operations of the individual restaurants.  But the standard impacts many industries, including wholesale distribution – for example, any company that hires workers through a staffing agency could be impacted.

The Trump-appointed majority on the NLRB has already tackled this issue with a couple of complicated votes, but the new Board Chairman, John Ring, has announced his intention to clarify the joint employer standard through an official rulemaking in addition to adjudicating it through individual cases.

Yesterday NAW joined about 20 allied trade associations and the Coalition for a Democratic Workplace in filing a petition with the National Labor Relations Board urging them to pursue an official rulemaking on the Joint Employer standard. We will be following this issue as the Board moves forward and plan to participate in the rulemaking.