On September 14, 2018, the National Labor Relations Board (NLRB) published a Notice of Proposed Rulemaking in the Federal Register regarding its joint-employer standard. Under the proposed rule, an employer may be found to be a joint employer of another employer’s employees only if the two employers “share or codetermine the employee’s essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.” As the NLRB explains, “a putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”

This new standard, if adopted, would reverse the standard introduced by the Browning-Ferris case in August of 2015, which established that a company could be deemed a joint employer even if its “control” over the essential working conditions of another businesses’ employees was indirect, limited, and routine or contractually reserved but never exercised.

It’s important to note that, at this time, these are merely proposed rules and do not yet reverse the Browning-Ferris standard. The publication of the proposed rules starts a 60-day comment period during which the public may submit comments to the NLRB regarding the proposed rules. If this new standard is adopted, it should bring clarity that (given normal conditions) franchisors are not joint employers with their franchisees of the franchisees’ employees under the federal laws within the NLRB’s purview, and other federal agencies and states will hopefully follow suit.

We will keep you posted on developments, but feel free to reach out to us if you have any questions in the meantime.