October 27, 2023

Are You My Employer? NLRB Increases Odds (Again) the Answer is YES!

Whew! The last three months have seen a flurry of regulatory activity.  Here’s a quick list in case you missed the news. Then, a bit about the NLRB’s latest.

So, what is the last one all about
? The Board has changed the rule, yet again, as to how they will determine when two completely separate entities are joint employers over one or more workers. This is the fourth flip (or flop) in the last eight years. In sum, the 73-page rule (of which the first 37 pages are preamble and the following 35 pages are dissent) establishes that Company A may be a joint employer over Company B’s employees if Company A, “possesses the authority to control (whether directly, indirectly, or both) or exercises the power to control (whether directly, indirectly, or both) one or more of the employees’ essential terms and conditions of employment, regardless of whether the employer exercises such control or the manner in which such control is exercised.” (emphasis added) This is the same or similar standard as we had in 2015 and 2018.

What’s an essential term or condition of employment? The list of what is NOT an essential term or condition might be shorter. Essential terms and conditions of employment include:

  1. Wages, benefits, and other compensation;
  2. Hours of work and scheduling;
  3. The assignment of duties to be performed;
  4. The supervision of the performance of duties;
  5. Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. The tenure of employment, including hiring and discharge; and
  7. Working conditions related to the safety and health of employees.

Bottom line. What’s the practical application
? Let’s say you use a company or vendor to provide a service for your company, such as cleaning, remodeling, administrative, or technical support. That company sends one or more of their employees to work at your worksite.  You may not have met any of them. You do not give those employees any direction or exert any control over the manner or means of the work that they perform. You figure that is the job of their employer. The contract you have with the vendor, however, gives you the authority to do so.

Now, the vendor’s employees are trying to join, form, or assist in some union activities. You want no part of it, so you tell the vendor you don’t want their workers on your site anymore. Good luck with that. Under the new rule, you must engage in collective bargaining with respect to any term and condition of employment, including the non-essential ones, that you possess the authority to control, regardless of whether you ever actually exercised that control. The same rule applies to franchisees.

Next steps? Within hours of the rule’s publication, word spread of potential legal challenges from the International Franchise Association and some members of Congress.

This rule takes effect December 26, 2023. In the interim, talk to your company’s legal and/or labor counsel along with your company’s contracting officers. Review your existing and pending contracts for language that expressly states or even infers that you have authority over any of the essential terms and conditions of the vendor’s employees’ employment. If you find such language, consider the implications and whether you want to renegotiate your contract with the vendor.