Greater Louisville Inc. The Metro Chamber of Commerce 2019 Chamber of the Year
× Greater Louisville Inc. The Metro Chamber of Commerce

Media Center

November 15, 2018 5:51pm

New NLRB definition of joint employer is a step in the right direction

GLI submitted comments last week in response to the National Labor Relations Board’s (NLRB) Notice of Proposed Rulemaking regarding the federal definition of “joint employer” status. In case you’re not familiar, joint employer is a term used to describe the legal relationship between two business entities that are deemed jointly responsible for the same employee. But what exactly is the standard for a joint-employer relationship and how are employers to know when they meet the definition of joint-employer?

Ever since a 2015 NLRB ruling known as Browning-Ferris, these questions have been difficult to answer. That decision imposed a sweeping and excessively broad definition of joint employer and upended decades of settled labor law. The volatility surrounding joint employer that followed Browning-Ferris also created problems. NLRB reversed the decision in 2017, which was then re-reversed in 2018. All the while, there has been litigation around the issue.  

NLRB’s recently proposed standard for joint employer goes a long way in providing clarity to this often complex issue. It states, “an employer may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction. A putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”

As GLI argued in its public comments, the proposed definition is a strong improvement over the current one. It appropriately limits the standard of joint employer, supports franchisor-franchisee relationships, and, unlike Browning-Ferris, relies on “direct and immediate control” instead of indirect control or the potential for control.

An issue like the definition of joint employer is an incredibly important one for the Greater Louisville business community. The headquarters for several large fast food brands, restaurants, gas stations, and medical companies are located in Greater Louisville, and many of these businesses franchise their brands, which, in turn, helps grow our small business community. In addition, Greater Louisville is home to many service contractors. Ensuring that all of these businesses are able to operate under reasonable, commonsense rules and standards is a top priority for GLI.

GLI will continue advocating for a clear and workable definition of joint employer throughout the rulemaking process and also supports legislative efforts to address the problems created by Browning-Ferris.  Legislation such as the Save Local Business Act and the Trademark Licensing Protection Act are both promising options. The next Congress should give careful consideration to bills like these in order to codify a pro-business standard for joint employer in federal statute.