The National Labor Relations Board, the main federal labor law enforcement agency, announced Wednesday that it would officially clarify its controversial “joint employer” policy.
The process will likely take almost a year before it is complete.
The joint employer policy determines when one business can be held legally responsible for workplace violations at a company it has ties to. The board’s new Trump-appointed majority has attempted to reverse an Obama-era precedent that vastly increased the potential liability of corporations, particularly ones that franchise.
Those efforts have been in limbo for several months following an unusual series of events at the NLRB. Wednesday’s announcement of the rulemaking indicates that the board is making a renewed effort, this time by rewriting the rule, a process that is set to be completed next spring.
“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today. The current uncertainty over the standard to be applied in determining joint-employer status under the act undermines employers’ willingness to create jobs and expand business opportunities,” said NLRB Chairman John Ring.
The official rulemaking process requires a public comment period.
For decades, the joint employer standard required a business to have “direct control” over another company’s workplace policies for it to be held liable for any workplace law violation. In a 2015 case called Browning-Ferris, the board’s Democratic majority changed the standard to the much vaguer “indirect control.”
The move sparked an outcry among business groups. In December, the NLRB, now with a Trump-appointed majority, restored the standard to “direct control” in a case called Hy-Brand. However, the board abruptly vacated the ruling this year when an internal probe determined that one of its members, William Emanuel, should have recused himself because of a conflict of interest with his previous employer, law firm Littler Mendelson. Emanuel has disputed that any conflict existed, calling the Office of the Inspector General report that found one an “absurd” reading of the law.
The upshot has been that the Obama-era precedent of indirect control is still in effect. The board likely will not be enforcing it, but it can still be cited in private-sector class-actions.
