Labor Law Update: NLRB to publish joint-employer rule change.
Employment/Labor Law: The National Labor Relations Board ("NLRB") said it will put a notice of proposed rulemaking tomorrow in the Federal Register that will modify its joint-employer standard. On its website this morning, the NLRB said under the proposed rule: "An employer may be found to be a joint-employer of another employer's employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine." The NLRB said that under that rule, indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship, which may mean some big changes for restaurant franchise chains. The NLRB said that the proposed rule is being made to lend some "predictability, consistency and stability" to the process of deciding which businesses are joint employers and which are not. This is a reflection of the initial board majority view that the National Labor Relations Act is supported better by a joint-employer doctrine that doesn't pull in third parties that it says haven't been actively involved in wage, benefit and employment decisions within a collective-bargaining relationship for another company's employees.