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Yesterday, the National Labor Relations Board (“NLRB”) released a draft rule that would finally overturn the controversial 2015 Brown-Ferris decision which permitted a finding of joint-employer liability upon a showing of “indirect control” or the ability to control.

As we previously reported here, last December, the Board attempted to reverse the Browning-Ferris joint employer standard in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156. However, in February, the Board reversed and vacated the Hy-Brand decision due to a report that questioned the appropriateness of one of the Board Members’ involvement. After the Board’s decision to vacate the Hy-Brand decision, employers have been stuck with the lax Browning-Ferris standard for finding joint employment.

The proposed rule, which can be read here, is set for publication today in the Federal Register. The rule proposes that the board will only find joint employment liability if the separate employer “possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment, and has done so in a manner that is not limited and routine.” Examples of “substantial, direct and immediate control” include hiring, firing, discipline, supervision, and direction. Indirect control and contractual reservation of authority would no longer be sufficient to establish joint-employer liability.

The proposed rule is open for public comments for the next 60 days. In announcing the proposed rule, Board Chairman John F. Ring states, “I look forward to receiving the public’s comments and to working with my colleagues to promulgate a final rule that clarifies the joint-employer standard in a way that promotes meaningful collective bargaining and advances the purposes of the Act.” Comments may be electronically submitted here or by mail or hand-delivery.

There are challenges ahead to pass the rule—the process is time consuming and cumbersome. The federal rulemaking process requires regulators to respond to the substance of ever comment it receives. Given the controversial nature of this standard, that could be an especially large task.

COUNSEL TO MANAGEMENT:

Until this proposed rule is passed, the unforgiving Browning-Ferris standard is still in effect. For now, we will wait and continue to monitor the proposed rule and will keep all updated. Should you have any questions or concerns regarding joint employer liability, do not hesitate to contact the experts at The Saqui Law Group.

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