The National Labor Relations Board (NLRB) often changes its stances on certain issues when there is a change in administration. One of the higher profile areas where this has been the case over the last 15-plus years or so is the NLRB's standard for evaluating “joint employment.” Well, it's happened again.

According to a recent article from Bloomberg Law: 

The National Labor Relations Board formally reinstated its 2020 rule governing when a company is deemed a joint employer under labor law after a federal court vacated a Biden-era definition two years ago.

The NLRB said in a final rule released Thursday it was replacing the text of the vacated regulation with that of a standard finalized near the end of President Donald Trump’s first term. The 2020 rule requires a company exercise ‘substantial direct and immediate’ control over another firm’s workers to be classified as a joint employer.

The standard the NLRB is reverting to now is likely more favorable to employers, as it will be harder to impose a joint employer finding in many cases.

The joint employment doctrine is often used by federal agencies to impose liability on two or more companies with respect to a group of employees, such as a staffing company and its client or a franchisor and franchisee. For example, the NLRB can use the doctrine to impose liability for violations of the National Labor Relations Act (NLRA) on multiple companies, and the agency has been at the forefront of changes to how joint employment is evaluated.  

A finding of joint employment can have significant consequences for companies under the NLRA. From a practical perspective, each company found to be a joint-employer by the NLRB may be held liable for the unfair labor practices of their co-employers. 

That is, companies not only need to account for their own compliance with the NLRA, they must also attempt to ensure compliance by any company with whom they are determined to be a joint employer. Accordingly, companies should take note of this development as they evaluate this issue as it relates to their own operations.