NLRB Proposes Rule to Change its Joint-Employer Standard

WASHINGTON—The National Labor Relations Board has proposed a rule to change its joint-employer standard. With this change, 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. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.

As explained in the Notice, rulemaking in this important area of the law would foster predictability, consistency and stability in the determination of joint-employer status, according to the board. The proposed rule reflects the board majority’s initial view, subject to potential revision in response to public comments, that the National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.

Public comments are invited on all aspects of the proposed rule and should be submitted within 60 days of the notice’s publication in the Federal Register, either electronically to, or by mail or hand-delivery to Roxanne Rothschild, deputy executive secretary, National Labor Relations Board, 1015 Half Street S.E., Washington, DC, 20570-0001.

Commenting on the proposed rule change, AAHOA President and CEO Chip Rogers issued the following statement: “America’s hotel owners applaud this important step toward resolving the confusion stemming from the disastrous Browning-Ferris Industries ruling that upended the franchise industry. Ensuring that employers and their employees enjoy a direct relationship without undue interference from third parties who play no role in hiring, scheduling, setting wages, or other essential elements of employment is necessary to preserve franchising as a successful pathway to the American Dream. Businesses thrive when there is clarity, consistency, and stability. We encourage hoteliers and other small business owners who employ the franchise business model to make their voices heard during the public comment period.”

He continued, “AAHOA and its more than 18,000 members will continue to encourage a statutory remedy to the joint-employer standard through its support for H.R. 3441, the Save Local Business Act. This would codify the historical joint-employer standard and prevent future administrations from changing the rules in the middle of the game without congressional approval. America’s hotel owners call on the Senate to introduce and pass a companion bill that would limit the type of bureaucratic overreach that created this mess in the first place.”

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