Joint Employer Rule Coming This Summer

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By Chris Opfer

The National Labor Relations Board plans to propose a rule updating its position on joint employer liability for affiliated businesses by the end of the summer, Chairman John Ring (R) said today.

“A majority of the Board is committed to engage in rulemaking, and the NLRB will do so,” Ring said in a letter to Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and Kirsten Gillibrand June 5. The former management attorney responded to concerns from the lawmakers that the board’s Republican majority was skirting ethics questions and has already decided to revert to a more limited joint employment standard in place before the Obama board updated it in 2015.

How the NLRB answers the joint employment question will affect how companies in franchise, staffing, and other contractual arrangements do business. It will also affect unionizing efforts for labor organizations whose private sector membership rates are on the decline.

The NLRB held in a decision in December that one business has to exert direct control over another’s workers to be considered their joint employer for unionization purposes. The board scrapped that decision after the agency’s inspector general said Member William Emanuel (R) shouldn’t have participated because his former law firm was connected to the case.

That left in place a board decision issued when the NLRB was controlled by Democrats. That decision allows businesses in staffing, franchise, or other contractual relationships to be tagged as joint employers if they exert indirect control over another company’s workers.

Ring announced in April, weeks after he was sworn in, that the board would address the controversial issue again via regulation. That would be the third time the standard has changed during the Trump administration.

Ring also told the lawmakers that the NLRB is reviewing its process for considering conflicts of interest among board members. He said the board would announce “in the near future a comprehensive internal ethics and recusal review to ensure that the Agency has appropriate policies and procedures in place to ensure full compliance with all ethical obligations and recusal requirements.”

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