By Jamie Salazer
The National Labor Relations Board (“NLRB”), a federal agency that protects employees’ rights and prevents unfair labor practices, proposed a new rule that could impact a company’s relationship with individuals who work for them, but are employed by a different company. The Notice of Proposed Rulemaking regarding the new joint-employer standard was published in the Federal Register on September 14, 2018. If enacted as proposed, this rule will affect whether two employers will be classified as a joint employer under the National Labor Relations Act (NLRA). Employers are considered joint-employers “if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.”
The joint-employer standard was originally developed through case law and has, in recent years, been transformed. The NLRB expanded the scope of those who qualify as a joint-employer in its Browning-Ferris Industries (“Browning-Ferris”) decision in 2015. Under Browning-Ferris, a company that exhibited indirect control or merely reserved the right to control another company’s employee qualified as a joint-employer. However, in 2017, the Board vacated the previous Browning-Ferris standard in its Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand”) decision. Under Hy-Brand, a company must directly and immediately exercise control over employment terms of another company’s employees to be deemed a joint-employer. Unsurprisingly, the NLRB’s proposed new rule is also consistent with the Hy-Brand decision. Indeed, the new rule would require the employer to actually exercise control in order to be deemed a joint-employer. The NLRB’s decision to make the joint-employer standard a rule, rather than leaving it as case law, is in furtherance of making the NLRA more predictable and consistent.
The proposed new rule, if enacted as currently proposed, could impact many employers in a positive way. The rule provides much more clarity than the Browning-Ferris standard and it is more consistent with the Department of Labor (“DOL”) and the Equal Employment Opportunity Commission’s (“EEOC”) standard for deeming one a joint-employer. Under the Browning-Ferris standard, employers would qualify as a joint-employer under the NLRB, but would not qualify as one under other agencies. Thus, with the new rule, companies will be better able to tell whether they qualify as someone’s joint-employer when initially entering into an agreement with another employer. Certain industries will likely also see direct impacts if the new rule is enacted as proposed. For example, some believe that the franchise community and the gig economy, which consists of ridesharing companies, will no longer risk being seen as joint-employers of individuals who do work for their companies. In addition, this new rule could also help collective bargaining agreements because, under the proposed rule, both of the entities would be considered joint-employers.
 Board Proposes Rule to Change its Joint-Employer Standard, Nat’l Labor Relations Bd., Sept. 13, 2018, https://www.nlrb.gov/news-outreach/news-story/board-proposes-rule-change-its-joint-employer-standard.
 The Standard for Determining Joint-Employer Status, 83 Fed. Reg. 179 (proposed Sept. 14, 2018) (to be codified at 29 C.F.R. pt. 1).
 See Pamela Wolf, NLRB proposes new joint-employer standard tracking vacated Hy-Brand decision, Wolters Kluwer (Sept. 17, 2018), https://www.employmentlawdaily.com/index.php/news/nlrb-proposes-new-joint-employer-standard-tracking-vacated-hy-brand-decision/.
 NLRB Vacates Hy-Brand Decision, Steptoe & Johnson PLLC: Know How: Alert (Mar. 5, 2018), https://www.steptoe-johnson.com/content/nlrb-vacates-hy-brand-decision.
 Wolf, supra note 5.
 Wolf, supra note 5.
 Pamela Wolf, A deeper look at the NLRB’s joint-employer proposal, Wolters Kluwer (Sept. 14, 2018), https://hr.cch.com/eld/091418SPJointERproposalFinal.pdf.
 Id. at 1.
 Id. at 2.
 See, e.g., id. (noting that both franchise community and the gig economy employers do not have substantial control over contractors who work for them).