Clarity At Last: Joint Employers Must Exercise Substantial Direct and Immediate Control

February 25, 2020 | Labor Relations, National Labor Relations Board

The NLRB announced today that it is set to publish its long awaited joint employer rule on Feb. 26, 2020. To be a joint employer under the final rule, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees.

The final rule defines key terms, including what are considered “essential terms and conditions of employment,” and what constitutes “direct and immediate control” as to the essential employment terms. The final rule also defines what constitutes “substantial” direct and immediate control and makes clear that sporadic and isolated control is not “substantial.”

The clarity provided by this rule will be welcomed by employers that have been operating under a tenuous joint employer standard for many years. In 2015, the NLRB issued a decision in Browning-Ferris that changed the previous “direct control” test to a more lenient test that would establish joint employment even if the company exercised “indirect control” or “reserved” the right to control, essential employment terms of another employer’s employees. The NLRB reversed course in 2017, only to later vacate that decision after one of the NLRB members was found to have an ethical conflict. The NLRB then decided to address the joint employer issue through its rulemaking powers, and it issued a Notice of Proposed Rulemaking in September 2018.

Under the new rule, evidence of indirect or contractually reserved control over essential employment terms may be a consideration for finding joint-employer status, but it will not be determinative without substantial direct and immediate control.

The rule, which will become effective April 27, 2020, received more than 28,000 comments from the public. The rule will have a profound positive impact on businesses engaged in franchising and those that heavily utilize staffing agencies or third party labor providers. Under the new rule, it will be less likely that one company will be liable for the unfair labor practices of another. Similarly, it will be less likely that a company will be subjected to union picketing and other economic pressure during a labor dispute between a union and another entity.

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January 27, 2017 | National Labor Relations Board, Labor Relations

Court Of Appeals Reverses NLRB, Finds Hospital’s Nonunion Hiring Preference Policy Is Lawful

January 24, 2017 | National Labor Relations Board, Labor Relations

Obama NLRB Deep Sixes Employer Defense on Procedural Grounds

January 20, 2017 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Jan. 3-6

January 12, 2017 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Dec. 27-30

January 9, 2017 | National Labor Relations Board, Labor Relations

Weekly Summary of NLRB Decisions for Week of Dec. 19-23

December 30, 2016 | National Labor Relations Board, Labor Relations

Past Isn’t Prologue: Study Finds NLRB Nullified 4,500+ Years of Precedent Over Last Eight Years

December 27, 2016 | National Labor Relations Board, Labor Relations

Weekly Summary of NLRB Decisions for Week of Dec. 12-16

December 19, 2016 | National Labor Relations Board, Labor Relations

Weekly Summary of NLRB Decisions for Week of Nov. 28-Dec. 2

December 15, 2016 | National Labor Relations Board, Labor Relations

Weekly Summary of NLRB Decisions for Week of Nov. 21-25

December 2, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Nov. 14 - 18

November 28, 2016 | National Labor Relations Board, Labor Relations

NLRB Affirms Decision Finding Charter Schools Subject to NLRA

November 23, 2016 | National Labor Relations Board, Labor Relations

A Chink in Specialty Healthcare’s Micro Unit Armor?

November 22, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Nov. 7-10

November 18, 2016 | National Labor Relations Board, Labor Relations

The Trump Presidency and the NLRB: Change May Come Slowly

November 15, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Oct. 31 - Nov. 4

November 14, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Oct. 24-28

November 4, 2016 | National Labor Relations Board, Labor Relations

Fourth Circuit Finds Nurses Are Not Supervisors - Could Unionize

November 3, 2016 | National Labor Relations Board, Labor Relations

U.S. Chamber of Commerce Report Confirms NLRB’s Infamous Specialty Healthcare Decision Has Given Rise to More Micro-Units

November 1, 2016 | National Labor Relations Board, Labor Relations

NLRB Member Kent Y. Hirozawa’s Term Expires – But He Left His Mark On U.S. Labor Law

September 7, 2016 | National Labor Relations Board, Labor Relations

NLRB Enhances Backpay Compensation for Terminated Workers

August 25, 2016 | National Labor Relations Board, Labor Relations

Down Goes Brown – NLRB Finds Graduate Assistants May Unionize

August 23, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Aug. 1 - 5

August 22, 2016 | National Labor Relations Board, Labor Relations

Employers’ Role In Decertification Efforts Continue To Receive Intense Scrutiny

August 8, 2016 | National Labor Relations Board, Union Organizing, Labor Relations

Buyer Beware – NLRB Decision Creates New Risks for Purchasers of Union Operations

August 3, 2016 | National Labor Relations Board, Labor Relations

NLRB Ruling: Temps Can be Part of Bargaining Units

July 11, 2016 | National Labor Relations Board, Labor Relations

NLRB Hits Ceiling in Continual Push to Expand Scope of Protected Concerted Activity

July 6, 2016 | National Labor Relations Board, Labor Relations

Supreme Court to Decide if Presidential Appointees Can Fake It Until They Make It

June 21, 2016 | National Labor Relations Board, Labor Relations

NLRB’s “Ambush Election Rules” Get Stamp of Approval from Fifth Circuit

June 15, 2016 | National Labor Relations Board, Labor Relations

Fifth Circuit Agrees NLRB Micro-Unit Test Here to Stay

June 9, 2016 | National Labor Relations Board, Labor Relations

Can Lawful Employer Policies Put Companies at Risk? NLRB Says Yes

June 8, 2016 | National Labor Relations Board, Labor Relations

Are Permanent Replacements Permanent Anymore?

June 3, 2016 | National Labor Relations Board, Unions and Union Membership, Labor Relations

NLRB Defends Attempt to Encroach on Tribal Sovereignty

May 27, 2016 | National Labor Relations Board, Labor Relations

The Latest in the NLRB Handbook Saga? Another Unlawful Recording Policy Fails to Pass Muster

May 13, 2016 | National Labor Relations Board, Labor Relations

NLRB Disregards Corporate Entity and Holds Individual Owners Liable for CBA Violations

May 7, 2016 | National Labor Relations Board, Labor Relations

Don’t Gamble With Your Email Policy

May 6, 2016 | National Labor Relations Board, Labor Relations

You Can’t Make Me Be Positive!

May 3, 2016 | National Labor Relations Board, Labor Relations

Ties Go to the Runner and the NLRB

April 21, 2016 | National Labor Relations Board, Labor Relations

NLRB Continues To Cite Its Infamous Specialty Healthcare Decision When Affirming Funky Bargaining Units

April 4, 2016 | National Labor Relations Board, Labor Relations

Obama Supreme Court Nominee and the NLRB

March 24, 2016 | Labor Relations

Summary of NLRB Decisions for Week of Feb. 22-26, 2016

March 22, 2016 | National Labor Relations Board, Labor Relations

Summary Data Released by NLRB Confirms Its “Ambush Election Rules” Truncate Time Between Petition, Election

March 21, 2016 | National Labor Relations Board, Labor Relations

Burrito Bowls, Guacamole, &. . .Tweets? NLRB Judge Finds Social Media Policy Unlawful

March 18, 2016 | National Labor Relations Board, Labor Relations

Right-to-Work – Union Shenanigans and Another State (Colorado) In Play

March 17, 2016 | Unions and Union Membership, Labor Relations

NLRB Activism Has A Cost: Budget Shortfalls and NLRB’s “Belt Tightening”

March 16, 2016 | National Labor Relations Board, Labor Relations

Summary of NLRB Decisions for Week of Feb. 1 - 5, 2016

March 1, 2016 | National Labor Relations Board, Labor Relations

NLRB Commits Unfair Labor Practice With Its Own Union

February 26, 2016 | National Labor Relations Board, Labor Relations

NLRB Exploring Possible Expansion To Its ‘Make-Whole Remedies’ In Discharge Cases

February 23, 2016 | National Labor Relations Board, Labor Relations

Court Holds Company Can Reject Terms, Conditions of Expired CBA

February 15, 2016 | National Labor Relations Board, Labor Relations

11th Circuit Overturns NLRB: Finds Atlanta-area Stagehands are Independent Contractors

February 4, 2016 | National Labor Relations Board, Labor Relations

NLRB’s New Joint-Employer Standard To Be Put To The Test In Federal Court

January 26, 2016 | National Labor Relations Board, Labor Relations

Law Professors Petition for New NLRB Rule: Union “Captive Audience” Meetings

January 21, 2016 | National Labor Relations Board, Labor Relations

Browning-Ferris “All In” On Joint Employer Battle With NLRB

January 15, 2016 | Unions and Union Membership, Labor Relations

Another One Bites the Dust: NLRB Invalidates Another Widely-Used Personnel Policy

January 5, 2016 | National Labor Relations Board, Labor Relations

It Looks Like the Supreme Court will Disapprove of the NLRB’s Continued Attack On Class Action Waivers…But When Will We Know For Sure?

December 28, 2015 | National Labor Relations Board, Labor Relations

BT Labor Relations National Labor Relations Board Decisions 2015 Year-in-Review

December 22, 2015 | National Labor Relations Board, Labor Relations

Let The Chips Fall: When Is an Impasse An Impasse?

December 14, 2015 | National Labor Relations Board, Labor Relations

UAW Accused of Failing to Honor Michigan Right to Work Law

December 2, 2015 | National Labor Relations Board, Labor Relations

Micro-Unit Organizing & New NLRB Election Rules Mean Manufacturing Employers Must Be Vigilant

November 30, 2015 | National Labor Relations Board, Labor Relations

Confidentiality Guaranteed? The D.C. Circuit Calls Into Question NLRB’s Banner Health Decision

November 25, 2015 | National Labor Relations Board, Labor Relations

NLRB Steps Up Enforcement Against Class Action Waivers

November 24, 2015 | National Labor Relations Board, Labor Relations

What Is It Really Like To Deal With The NLRB’s New Quickie Election Rules (Part 1)

November 13, 2015 | National Labor Relations Board, Labor Relations

Target Faces First Ever Union

November 6, 2015 | National Labor Relations Board, Labor Relations

IBEW Rule Requiring Photo ID to Resign Upheld by NLRB Judge

November 4, 2015 | National Labor Relations Board, Labor Relations

NLRB Issues Updated Bench Book for ALJs

November 4, 2015 | National Labor Relations Board, Labor Relations

Employer Off-Duty Access Rule Roadmap (Kinda): NLRB Approves Off-Duty Access Rule But Finds Discrimination In Employer Application of That Rule

November 2, 2015 | National Labor Relations Board, Labor Relations

Better Late Than Never? In Election Using Mailed-In Ballots, NLRB Says Postal Service Failure Is No Excuse for Late Ballots

October 30, 2015 | National Labor Relations Board, Labor Relations

An NLRB Hobgoblin: NLRB Excelsior List Requirement Expanded Under Interpretation of Board’s New Election Procedure Rule

October 27, 2015 | National Labor Relations Board, Labor Relations

When Will the Other Shoe Drop? NLRB May Hand Down Second Blow after Browning-Ferris

September 30, 2015 | National Labor Relations Board, Labor Relations

NLRB: Not-for Profit Canvassers Are Not Independent Contractors

September 30, 2015 | National Labor Relations Board, Labor Relations

Employers Take Note: Just in Time for Labor Day NLRB Issues Multiple Decisions That Significantly Erode Many Employer Interests

September 4, 2015 | National Labor Relations Board, Labor Relations

Another Noel Canning Rubber Stamp – Obama NLRB Overturns 1962 Case and Holds that Dues Checkoff Duty Now Continues Beyond Contract Expiration

September 2, 2015 | National Labor Relations Board, Labor Relations

NLRB Election Rule Statistics Demonstrate Shorter Election Periods and Why Proactively Preparing for Union Organizing is Smart Business

September 1, 2015 | National Labor Relations Board, Labor Relations

The Hits Keep On Coming: NLRB Ruling Makes It Easier For Unions To Establish “Joint-Employers” Under The NLRA

August 31, 2015 | National Labor Relations Board, Labor Relations

NLRB: Filing an FLSA Collective Action is Protected Concerted Activity

July 31, 2015 | National Labor Relations Board, Labor Relations

Is The Supreme Court Primed to Create “Right-to-Work” for Public Employees Nationwide?

July 9, 2015 | State Labor Laws, Labor Relations

PROMISE OF CONFIDENTIALITY – NOT SO FAST

July 9, 2015 | National Labor Relations Board, Labor Relations

Can Graduate Assistants Organize? Columbia University Effort Could Result in the Reversal of the Brown Decision

June 29, 2015 | National Labor Relations Board, Labor Relations

NLRB Reaches Agreement With The Republic Of Colombia To Educate Colombian Citizens On The NLRA

June 16, 2015 | National Labor Relations Board, Labor Relations

NLRB Jurisdiction Over Indian Tribes – Uncertainty Abounds

June 12, 2015 | National Labor Relations Board, Labor Relations

The Aftermath of "Ambush" Elections - Union Petitions Increase, Median Time to Election Decreases During First Month of Controversial Rule

June 9, 2015 | National Labor Relations Board, Labor Relations

House Committee Considers “NLRB’s Assault on Right-to-Work”

June 4, 2015 | National Labor Relations Board, Labor Relations

NLRB Advice Memo Provides Additional Guidance on Joint Employer Standard

May 13, 2015 | National Labor Relations Board, Labor Relations

Analysis of NLRB Elections Prior to the New Ambush Election Rules

April 28, 2015 | National Labor Relations Board, Labor Relations

NLRB Signals It May Chip Away at Right to Work Laws

April 22, 2015 | National Labor Relations Board, Labor Relations

Unions Get Free Pass From The NLRB When It Comes To Facebook Postings?

April 21, 2015 | National Labor Relations Board, Labor Relations

They're Here -- New NLRB "Quickie" Election Rules Go Into Effect Today

April 14, 2015 | National Labor Relations Board, Labor Relations

NLRB General Counsel Issues Comprehensive Report on Handbook Rules

March 19, 2015 | National Labor Relations Board, Labor Relations

Non-Union Employers Beware: The NLRB Outlaws Employer’s Questions Regarding Supervisor's Performance

February 20, 2015 | National Labor Relations Board, Labor Relations

Ripples of Noel Canning Continue

February 20, 2015 | National Labor Relations Board, Labor Relations

NLRB: Employer letters regarding dues payment options violated NLRA

February 4, 2015 | National Labor Relations Board, Labor Relations

God in the Details - NLRB Modifies Test for Jurisdiction Over Religious Education Employers

January 22, 2015 | National Labor Relations Board, Labor Relations

DC CIRCUIT OVERTURNS NLRB ON COMPANY ONLY HAT RULE

January 20, 2015 | National Labor Relations Board, Labor Relations

NLRB Sued Over Quickie Election Rule

January 7, 2015 | National Labor Relations Board, Labor Relations

NLRB Upholds Subpoena of Employer’s Employee Handbook

January 6, 2015 | National Labor Relations Board, Labor Relations

NLRB DROPS THE OTHER SHOE – APPROVES QUICKIE ELECTION RULES

December 12, 2014 | National Labor Relations Board, Labor Relations

Senate Confirms McFerran as New NLRB Member

December 9, 2014 | National Labor Relations Board, Labor Relations

NLRB Ruling Critical of Company Distribution / Solicitation Rule

December 3, 2014 | National Labor Relations Board, Labor Relations

NLRB Advice Memo follows Alan Ritchey on Discretionary Discipline, Despite Nullification by Noel Canning

November 26, 2014 | National Labor Relations Board, Labor Relations

Amazon Settlement with NLRB a Reminder for Employers -- "Confidential" Wage Policies Violate the NLRA

November 25, 2014 | National Labor Relations Board, Labor Relations

President Swaps Out Choice for NLRB Seat

November 18, 2014 | National Labor Relations Board, Labor Relations

NLRB Continues To Invalidate Class Action Waivers In Mandatory Arbitration Programs

November 3, 2014 | National Labor Relations Board, Labor Relations

Advocacy of Insubordination on Facebook Is Concerted But Not Protected Activity

October 30, 2014 | National Labor Relations Board, Labor Relations

NLRB Chooses Form Over Function

August 20, 2014 | National Labor Relations Board, Labor Relations

1 Is NOT The Loneliest Number…At Least At The NLRB

August 13, 2014 | National Labor Relations Board, Labor Relations

NLRB applies Specialty Healthcare "micro-union" standards to retail industry with mixed results

August 6, 2014 | National Labor Relations Board, Labor Relations

NLRB Shoots Down Another Confidentiality Rule

August 5, 2014 | National Labor Relations Board, Labor Relations

NLRB Ratifies All Administrative Actions in Wake of Noel Canning Decision

August 4, 2014 | National Labor Relations Board, Labor Relations

NLRB WEEKLY SUMMARY OF DECISIONS, July 14-18

July 23, 2014 | National Labor Relations Board, Labor Relations

NLRB Decides Not to Risk Its D.R. Horton Decision

July 22, 2014 | National Labor Relations Board, Labor Relations

Labor Lawyers, Constitutional Scholars Await Noel Canning

June 23, 2014 | National Labor Relations Board, Labor Relations

NLRB Again Overturns Discharge Of Employee Who Engaged In A Profanity-Laced Argument With A Manager In Front Of Customers

June 18, 2014 | National Labor Relations Board, Labor Relations

A Rare Facebook “Like” for Employers: NLRB Overturns ALJ, Finds Lack of Evidence to Support Facebook Post as Protected Activity

February 21, 2014 | National Labor Relations Board, Labor Relations

“The More Things Change, The More They Stay The Same”: Bureau of Labor Statistics Releases Report On U.S. Unionization Rates For 2013

January 27, 2014 | Unions and Union Membership, Labor Relations

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Clarity At Last: Joint Employers Must Exercise Substantial Direct and Immediate Control

Thomas C. Payne

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