NLRB’s Joint Employer Rule
Signals a Welcome Return
to Sensible Workplace
Regulation
By Rae T. Vann
For countless companies that
contract with other businesses for
human capital or other services
in which the employees of one
entity are deployed to perform
work for another, there is always
a risk that the misdeeds of one
will also land the other in trouble.
For instance, if Company A enters
into a contractual arrangement
with Company B to provide on-
site contingent staff support,
and an employee of the former
harasses an employee of the
latter, can both be sued and held
liable for discrimination? In the
union context, can a group of
Company B’s employees placed in
a long-term assignment working
alongside unionized workers
demand to be recognized by
Company A?
Imposing joint employer liability
on two business entities can
have serious legal and practical
workplace compliance and risk
mitigation implications. In the
federal labor relations context, the
joint employer doctrine is critical
in determining when a business
entity has a legal duty to bargain
14
DITCHMEN • JANUARY-FEBRUARY 2020
with workers directly employed
by another business entity and
may be liable for that entity’s unfair
labor practices or “may be targeted
as a primary employer in a labor
dispute.”
On February 26, 2020, the National
Labor Relations Board published
a final rule designed to clarify the
circumstances under which two
unrelated business entities may be
considered joint employers under
the National Labor Relations Act.
The rule effectively overrules a
controversial 2015 NLRB decision
that purported to expand long-
standing precedent in a manner
that threatened to expose a
substantially larger number of
businesses to potential liability as
joint employers for NLRA violations
than ever before.
The final rule adds a new section
to the NLRB’s existing regulations
devoted exclusively to the subject
of joint employer status. It provides
that a business may be considered
a “joint employer” of another
business’s direct employees
only if the two entities “share or