Last week, the National Labor Relations Board (NLRB) released a decision that changes the standard for determining when two separate companies qualify as “joint employers” and thereby become subject to the duties of direct employers under the National Labor Relations Act (NLRA), including the duty to bargain collectively with unions over essential terms and conditions of employment. The 3-2 decision reverses the NLRB’s controversial Browning-Ferris decision from 2015 and restores the joint employer standard that had been well established for several decades prior to Browning-Ferris.
As a result of last week’s decision, a company that uses another company’s employees will be deemed a “joint employer” of such employees under the NLRA only if the company has exercised direct and immediate control over essential employment terms of the borrowed employees and has done so in a manner that is not limited and routine. The decision reverses the principle from Browning-Ferris that a company can qualify as a joint employer if it merely has reserved authority to control borrowed employees but has not directly exercised such control.
Because many staffing services agreements reserve to the company obtaining the staffing services rights over the borrowed employees, the NLRB’s 2015 decision had created uncertainty for companies, including hospitals and health systems, that contract with staffing agencies where the borrowed employees are unionized.
The NLRB’s decision can be found here..
If you have questions or comments on the decision, contact Andrew Brenton WHA, assistant general counsel, at email@example.com or 608-274-1820.