Congress isn’t waiting for the National Labor Relations Board (NLRB) or the U.S. Circuit Court of Appeals. The Save Local Business Act, a bill with bipartisan support, has been introduced in the House of Representatives to rewrite the definition of joint employer.
The NLRB’s 2015 decision in Browning-Ferris expanded the definition of joint employer. In Browning-Ferris, the Board found that Browning-Ferris was a joint employer with Leadpoint, the company that supplied employees to Browning-Ferris to perform various work functions. In finding that Browning-Ferris was a joint employer, the Board relied on indirect and direct control that Browning-Ferris possessed over essential terms and conditions of employment of the employees supplied by Leadpoint as well as Browning-Ferris’s reserved authority to control such terms and conditions. This decision is currently on appeal to the U.S. District Court of Appeals.
As a result of the Browning-Ferris decision, many businesses with indirect control over other entities may be found to be a joint employer. This has made many businesses shy away from expanding out of fear of the legal issues that might arise under this expanded definition. Previously, a business had to have direct control in order to be found a joint employer with another entity.
The Save Local Business Act would amend the National Labor Relations Act to state:
A person may be considered a joint employer in relation to an employee only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment (including hiring employee; discharging employees; determining individual employee rates of pay and benefits; day-to-day supervision of employees; assigning individual work schedules, positions, and tasks; and administering employee discipline).
If this bill is enacted, it would provide a permanent definition of joint employer. Currently, joint employer is defined by decisions coming out of the NLRB. The NLRB is known for changing course when the board’s composition changes from one political party to another. Therefore, without a concrete definition in statute, a future NLRB decision could change the definition again.
David French, National Retail Federation senior vice president for government relations, said, “Retailers are relieved that lawmakers are stepping in to clear up the confusion created when bureaucrats muddied the water on what constitutes a joint-employer relationship. One business should not be held responsible for the actions of another, and this measure will clarify that once and for all.”
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