Nlra Case Notes

• Jurisdiction: United States,Federal
• Author: Maria Myers
• Citation: Vol. 38 No. 1
• Publication year: 2024

NLRA CASE NOTES

AUTHORS^*

Maria Myers

Hannah Weinstein

NLRB RETURNS TO FORMER JOINT EMPLOYER STATUS STANDARD

"Standard for Determining Joint Employer Status," 29 C.F.R. pt. 103, 88 Fed. Reg. 73946 (Published Oct. 27, 2023; Effective Feb. 26, 2024)

On October 27, 2023, the National Labor Relations Board (NLRB) issued its long-anticipated final rule for determining joint-employer status under the National Labor Relations Act (NLRA).¹ The new rule rescinds and replaces the most recent joint-employer rule issued under the Trump administration, which took effect in April 2020. The 2020 rule remains in effect until February 26, 2024, when the new rule will become effective if it is not stayed or enjoined through litigation or congressional action.

Historically, the NLRB's joint-employer analysis has centered on common law principles, which treat the right to control workers and their terms and conditions of employment as determinative, even if the putative joint employer has not exercised such control or has exercised control only indirectly. This analytical framework was first announced in the 1982 case, NLRB v. Browning-Ferris Industries of Pennsylvania, Inc.² Over time, the standard evolved, and the Board introduced additional considerations that prioritized direct control. In 2015, the Board aimed to bring clarity to joint-employer analysis in Browning-Ferris Industries of California, Inc.³ On review, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Board's determination that both reserved and indirect control could be relevant in analyzing joint-employer status.⁴

In 2020, the Trump Board promulgated a final rule, modifying the standard for analyzing joint-employer status. It increased the burden of proof by requiring a showing that purported joint employers possess and exercise "direct and immediate control" over one or more essential terms and conditions of employment—such as wages, hours of work, or discipline—so that the entity "meaningfully affects matters relating to the employment relationship with those employees."⁵

The new rule returns to the Browning-Ferris standard for determining joint-employer status. As before, the party asserting joint employer status bears the burden of proving that the putative joint employer meets the standard. Under the new rule, two or more entities will be considered joint employers if they "share or codetermine" employees' essential terms and conditions of employment. The rule defines "share or codetermine" as either possessing "the authority to control (whether directly, indirectly, or both)" or exercising the power to control "one or more of the employees' essential terms and conditions of employment."

In a major departure from the 2020 rule, which required a showing of "direct and immediate control," the new rule clarifies that an entity's mere authority to control terms and conditions of employment is sufficient to establish joint-employer status, even if that entity does not actually exercise control. Moreover, an entity's indirect exercise of the power to control terms or conditions—for example, through a third-party—is sufficient to establish status as a joint employer.

The rule also establishes an exhaustive list of seven categories of terms and conditions of employment that will be considered "essential" for the joint-employer inquiry:

1. wages, benefits, and other compensation;
2. hours of work and scheduling;
3. assignment of duties to be performed;
4. supervision of the performance of duties;
5. work rules and directions governing the...