NLRB Issues New Rule Broadening Joint-Employer Status

The National Labor Relations Board (NLRB) recently issued a final rule setting forth a new standard for joint-employer status under the National Labor Relations Act (NLRA). The new rule, which is set to go into effect on December 26, 2023, drastically broadens the scope of who can be considered a joint employer under the NLRA.

Background

In 2015, the Obama NLRB issued its decision in Browning-Ferris Industries of California, Inc., which overturned years of precedent by dramatically expanding the definition of joint employer and resulting in many more independent companies being treated as joint employers. Under this decision, two entities could be deemed to be joint employers based only on the existence of reserved joint control, indirect control, or control that was limited and routine. This decision had a potentially broad impact on, for example, franchisors who exercised operational control over franchisees and, thereby, control over the employees of such