Changes to the NLRB’s Joint Employer Test

On September 13, 2018 the National Labor Relations Board (NLRB) released a draft rule rolling back the 2015 Browning-Ferris test for determining joint employment. Browning-Ferris became the law of the land once again earlier this year when the NLRB overruled its decision in Hy-Brand due to a perceived conflict with one of the board members. The NLRB’s draft rule took effect the following day, September 14, 2018.

The new rule states that a business jointly employs another entity’s employees if it “possesses and exercises substantial, direct and immediate control” over those employees’ “essential terms and conditions of employment” in a manner that is not limited or routine. Essential terms of employment include hiring, firing, discipline, supervision, and direction. Browning-Ferris allowed for proof of indirect control or contractually-reserved control that had never even been exercised. This analysis led to broad interpretations of employer control and many findings of joint employment that would obviously not have been made under Hy-Brand. Browning-Ferris was beneficial for employees in this regard. The NLRB has now swung back in the employers’ favor by returning to the standard of requiring direct control over essential terms in order to be considered a joint employer.