Dual Employment and the Proposed NLRB Joint-Employer Standard

Workers’ compensation claims may be pursued against two companies if there is found to be joint employment. While case law defines employment status, the US National Labor Relations Board has issued a proposed Rule to substantiate a dual employer status. 

The National Labor Relations Board released a Notice of Proposed Rulemaking (NPRM) addressing the standard for determining joint-employer status under the National Labor Relations Act. The NPRM proposes to rescind and replace the joint-employer rule that took effect on April 27, 2020.  The proposed changes are intended to explicitly ground the joint-employer standard in established common-law agency principles, consistent with Board precedent and guidance that the Board has received from the U.S. Court of Appeals for the DC Circuit.  

“When an employee may appear to work for two employers simultaneously, critical issues are presented as to which employer is responsible for the payment of workers' compensation benefits and whether either or both employers have the benefits of the “exclusivity doctrine” available to defend against a third party action. An employee may be considered to have two employers simultaneously for workers' compensation purposes.” 38 N.J. Prac., Workers' Compensation Law § 7.7 (3d ed.) 2022. 

Proposed NLRB Rule 

Under the proposed rule, two or more employers would be considered joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment,” such as wages, benefits and other compensation, work and scheduling, hiring and discharge, discipline, workplace health and safety, supervision, assignment, and work rules.  The Board proposes to consider both direct evidence of control and evidence of reserved and/or indirect control over these essential terms and conditions of employment when analyzing joint-employer status. 

“In an economy where employment relationships are increasingly complex, the Board must ensure that its legal rules for deciding which employers should engage in collective bargaining serve the goals of the National Labor Relations Act,” said Chairman Lauren McFerran. “Part of that task is providing a clear standard for defining joint employment that is consistent with controlling law. Unfortunately, the Board's joint employer standard has been subject to a great deal of uncertainty and litigation in recent years. Rulemaking on this issue allows for valuable input from members of the public that will help the Board in its effort to bring clarity and certainty to these significant questions.” 

Chairman McFerran was joined by Board Members Gwynne A. Wilcox and David M. Prouty in proposing the new joint-employer standard. Board Members Marvin E. Kaplan and John F. Ring dissented.

Comments

Public comments are invited on all aspects of the proposed rule and should be submitted either electronically to regulations.gov, or by mail or hand-delivery to Roxanne Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half Street S.E., Washington, D.C. 20570-0001.

Comments on this proposed rule must be received by the NLRB on or before November 7, 2022. Comments replying to comments submitted during the initial comment period must be received by the Board on or before November 21, 2022. 

By Jon Gelman

Courtesy of Workers' Compensation

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