Coming on the heels of the Labor Day holiday, in a long anticipated move, the National Labor Relations (“NLRB”) Board issued a draft of a new proposed joint employer standard, scheduled to be published on September 7, 2022.  If ultimately implemented, the NLRB’s Notice of Proposed Rulemaking (“NPRM”) would nix the most recent joint employer standard (established in 2020) and return to the rule established by Browning-Ferris Industries of California, Inc., 362 NLRB 1599 (2015).  The joint employment framework is used to determine whether more than one entity controls the terms and conditions of employees, and thus, can be responsible under the NLRA to negotiate with a union, among other things.  Joint employer issues are most common between labor staffing firms and those using their services and franchise/franchisor relationships.

Since 2015, the NLRB has gone back-and-forth between two joint employment standards – one requiring direct control by both entities and the other focusing on potential “indirect” control. Democrat-majority Boards seek a broad rule which would include entities as joint employer that indirectly control or merely reserve the right to control the terms and conditions of employment of employees (2015 Browning Ferris decision); meanwhile, Republican-majority Boards have maintained the previously long-standing, traditional view that the joint employer framework must focus on whether a putative employer exercised “actual control” over the terms and conditions of employees (2018-2019 Rule).

Over just a few short years, both joint employment standards have received significant political backing from supporters and challenges by their respective detractors.  In 2017, the then-Republican-majority Board first attempted to reverse the Browning-Ferris rule via Board decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017).  However, the decision was later vacated after the NLRB Office of the Inspector General determined Board Member William Emmanuel’s participation in the Hy-Brand case violated an ethics rule (Exec. Order No. 13770(1)), because he had previously worked as a partner at Littler Mendelson, the law firm that represented an unsuccessful party in the Browning-Ferris litigation.

After Hy-Brand was vacated, the Trump Board looked to rulemaking to make their sought-after joint employer changes.  In 2018, the Trump Board proposed and later (in 2020) implemented a rule reversing the Board’s holding in Browning-Ferris and returning the joint employment framework to the previous, narrower standard.

In the September 6, 2022 NPRM, the Board majority asserted that the Browning-Ferris rule is most consistent with both Supreme Court precedent and over a century of common law joint employment decisions.  The NPRM announces: “[t]he proposed rule states that ‘two or more employers of the same particular employees are joint employers of those employees if the employers share or codetermine those matters governing employees’ essential terms and conditions of employment.’”  Such language, the Board asserts, captures the ultimate meaning of joint employment as “not whether the [putative joint employer] actually exercised control over the details of the work, but whether he had a right to exercise that control.”  NPRM, at 24 (citing treatises and several cases).  The Board insists the NPRM is consistent with the joint employment frameworks endorsed by several Courts of Appeal, including the Third Circuit and the D.C. Circuit.

Furthermore, citing “shortcomings” of the 2020 rule’s specific and exclusive list of essential terms and conditions of employment, the NPRM would also expand the definition of “essential terms and conditions of employment” by including workplace health and safety, assignments, and work rules and directions governing the manner, means, or methods of work performance.  Importantly, the new list is also specifically not exhaustive or limiting.

The two Republican Board members dissented to the issuance of the NPRM, stating that the NPRM is both legally incorrect and simply comes too soon after the 2020 rulemaking, which, among other things, could prevent the ability to provide meaningful guidance to employers regarding joint employment issues.

The Board seeks public comment on the NPRM for the next sixty (60) days — comments must be received by the NLRB on or before November 7, 2022, and reply comments must be received on or before November 21, 2022.  It is anticipated that the Board will move forward with the NPRM and implement it as a Final Rule shortly after the comment period expires.

Any such Final Rule will greatly expand the potential for labor litigation for employers that have relationships with staffing agencies, are part of a franchise model, or even use outside organizations to handle certain aspects of their employees’ working conditions, such as payroll companies.

As always, we will provide detailed analysis and guidance on the far-reaching effects of any issued Final Rule in the weeks to come.

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Photo of Michael Lebowich Michael Lebowich

Michael J. Lebowich is a partner in the Labor & Employment Law Department and co-head of the Labor-Management Relations Group. He represents and counsels employers on a wide range of labor and employment matters, with a particular interest in the field of traditional…

Michael J. Lebowich is a partner in the Labor & Employment Law Department and co-head of the Labor-Management Relations Group. He represents and counsels employers on a wide range of labor and employment matters, with a particular interest in the field of traditional labor law.

Michael acts as the primary spokesperson in collective bargaining negotiations, regularly handles grievance arbitrations, assists clients in the labor implications of corporate transactions, and counsels clients on union organizing issues, strike preparation and day-to-day contract administration issues. He also has significant experience in representation and unfair labor practice matters before the National Labor Relations Board.

His broad employment law experience includes handling of race, national origin, gender and other discrimination matters in state and federal court. A significant amount of his practice is devoted to counseling clients regarding the application and practical impact of the full range of employment laws that affect our clients, including all local, state and federal employment discrimination statutes, the Fair Labor Standards Act, the Family and Medical Leave Act, and state labor laws.

Michael has substantial experience in a wide variety of industries, including entertainment, broadcasting, newspaper publishing and delivery, utilities and lodging. He represents such clients as The New York Times, BuzzFeed, ABC, the New York City Ballet, PPL, Pacific Gas & Electric, Host Hotels and Resorts, and The Broadway League (and many of its theater owner and producing members).  Michael also has significant public sector experience representing, among others, the City of New York and the Metropolitan Transportation Authority.

Michael is a frequent guest lecturer at Columbia Business School, the Cornell School of Hotel Administration, the New York University Tisch School for Hospitality, Tourism and Sports Management, and is an advisory board member of the Cornell Institute for Hospitality Labor and Employment Relations.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.