The concept of the Joint Employer has long been the subject of employment discourse. For decades, the National Labor Relations Board has been oscillating between definitions of who qualifies as a “joint employer.” In 2023, the Board provided a definition that sent numerous employers into a frenzy. It was no surprise when the board’s decision was challenged in court.
“The challenge lies in understanding that even indirect control over working terms could make an employer liable, a dramatic shift from prior rules, leading to widespread concern,” explained Attorney Harry Nalbandyan from Levin & Nalbandyan LLP.
Today’s blog will explain the concept of a joint employer, helping you understand its background, elemental aspects, and your position as an employer when facing a lawsuit.
Background of the Joint Employer Doctrine
Before the concept came alive, the United States Supreme Court had already decided what constitutes a master-servant relationship. Their position was that such a relationship is born if the master controls what is done and how it is done.
Over the years, the question of what constitutes an employer has been determined by considering the “right to control.” The only challenge was establishing whether this control included direct and indirect control or just the former. Courts and lawmakers have since debated this nuance, especially in light of evolving work structures, such as subcontracting, franchising, and the gig economy, where indirect control plays a significant role in shaping employment dynamics.
The 2023 Final Rule
The NLRB, in 2023, made a ruling on what sets apart a joint employer. As per the rule, if you had any control over the terms and conditions of employees, you would be considered a joint employer. It would be of no consequence that your control was reserved. However, this would include hiring agencies and independent contractors who, though they controlled the working terms and conditions, only had reserved control.
Notably, this represents a significant departure from the board’s decision in 2020, where an employer needed direct control to qualify as a joint employer. In the rule, if you controlled the pay, scheduling, work, or even supervision, regardless of whether it was indirect, you could be implicated in an employee’s suit. This explains the move to challenge the board’s decision.
What is a Joint Employer Currently?
The New Orleans 5th Circuit Court of Appeals threw the decision of the NLRB out. The rationale of the court was that this definition was expansive. It offered no clear definition of what control was and hence could raise ambiguities when dealing with suits of this type. Furthermore, it could also protract negotiations for collective bargaining by including parties whose only inclusion is hinged on some indirect control they are purported to have.
Therefore, the Court reverted to the 2020 position that they needed direct and immediate control for one to be considered a joint employer. The NLRB wanted to appeal this decision but proceeded to withdraw its appeal.
What Should You Do as a Joint Employer
As an employer, it is impossible to avoid employee issues. However, you should consult your attorney to word your contract to avoid ambiguities. Defining items that fall under direct control is a sure way to ensure that your role as a joint employer is well-defined. An employment attorney has experience with the different variations of work terms and conditions and stands to advise on how to properly draft contractual terms and establish them.
Conclusion
As an employer, dealing with employees’ suits may be challenging. When implicated as a joint employer, this then becomes complicated. With the NLRB providing different interpretations of the term joint employer, it becomes difficult to understand where you stand. However, with an employment attorney, you can define the responsibilities that set you apart as a joint employer. Knowing that this requires direct and immediate control, your attorney will lay out the specific terms that qualify as direct and immediate control.
