There’s a new joint-employer rule. Wait, another one?!? Yes, this one involves employers and labor unions.

Yesterday, the National Labor Relations Board swung the pendulum even further in favor of unions when it issued its Final Rule on joint employment.

In a press release, the Board described the new standard like this:

An entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or codetermine one or more of the employees’ essential terms and conditions of employment, which are defined exclusively as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.

The most likely application would be in situations involving either staffing companies or franchisors and franchisees.

As the Board said earlier when it formulated a variation of the joint-employer rule in 2020, a joint-employer finding has significant implications for rights and obligations under the NLRA relative to collective bargaining, strike activity, and unfair labor practice liability:

• If a union represents the employees, the joint employer must participate in collective bargaining over their terms and conditions of employment.
• Picketing directed at a joint employer that would otherwise be secondary and unlawful is primary and lawful.
• Each business comprising the joint employer may be found jointly and severally liable for the other’s unfair labor practices.

However, in adopting this new standard, the final rule rescinds the 2020 final rule that the prior Board promulgated.

In contrast to the 2020 final rule, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.

The new rule’s effective date is December 26, 2023, and the new standard will only be applied to cases filed after the effective date.

For those without the stamina to read through the entire final rule but want more information about the joint-employer rule than this blog post, check out this fact sheet on the new rule.