NLRB proposal eyes clarity on joint employment.

Byline: Thomas Franz

A rule proposal from the National Labor Relations Board sets out to provide more clarity for what is considered a joint-employer relationship.

The proposal would go in the opposite direction of a 2015 NLRB decision regarding joint-employment clarification.

According to an NLRB fact sheet on the proposed rule, an employer would be considered a joint employer of another employer's employees only if the two employers share the workers' essential terms and conditions of employment.

Claudia D. Orr, an employment attorney with Plunkett Cooney in Detroit, said this could impact, among other categories, temporary staffing agencies, franchises, contractors and subcontractors.

"If it passes, you must actually exercise control over the essential working conditions, like what their pay is, how they can be discharged and other terms," Orr said. "Now that it's going to make it more difficult for a joint-employer relationship to be found, there's less to be concerned with."

The purpose of the rule change is to create more predictability and consistency for determining joint-employer status.

The NLRB states in its proposal fact sheet that a company could no longer be deemed to be a joint employer based solely on indirect influence, a contractual reservation of authority that the company has never exercised, or its exercise of only limited and routine authority.

"As it relates to potential liability related to collective bargaining, workers' compensation and other issues that arise based on employer status, hopefully that from an employer standpoint, they'll see additional clarity and they'll know whether or not they're truly employers under the definition or not," said Nathaniel R. Wolf, an employment attorney with Mika Meyers PLC in Grand Rapids.

Impact on unions

If a joint-employer relationship is found, the NLRB states that it may compel a joint employer to bargain terms of workers employed by another employer.

Each company making up the joint employer may also be found jointly and severally liable for the other's unfair labor practices. Picketing rules would also be influenced by whether or not a joint-employer relationship is found.

"The biggest problem of this in my view is if you're not a union employer and you don't think you have any obligations with a union or to follow a collective bargaining agreement and you're deemed to be a joint employer with employees that you're using at your workplace and they're unionized, then...