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January 1, 2019

Court Adds To Joint Employer Uncertainty While Public Has Only 12 Days Left To Tell NLRB How It Should Handle Issue

The U.S. Circuit Court for the District of Columbia has issued a decision in the legal challenge to the National Labor Relations Board’s (NLRB) 2015 decision that expanded what entities were considered joint employers under the National Labor Relations Act (NLRA). Under that ruling, which overturned 30 years of precedent, companies were considered to be joint employers of their contractors or franchisees when they directly control over issues like hiring or firing and wages. As The National Law Review explains, the court’s ruling is difficult to understand and virtually ensures the legal saga surrounding this issue will continue for several years.

In a 2-1 ruling issued Dec. 28 the court said the NLRB was right to assert that indirect and potential control are “relevant” factors in determining joint employer status. That portion of the ruling would seem to uphold the expanded joint employer definition put into place three years ago. As the article linked to above explains, however, the court also said the NLRB “had not applied those relevant factors within the parameters of the common law.”

Consequently, the court asked that the NLRB consider the issue again. In doing so, as the National Law Review article asserts, “the court has now created more uncertainty” and because the NLRB already is reconsidering the case, practically, the Dec. 28 ruling “could have little impact.”

As a reminder, the public has until Jan. 14, 2019 to comment on the NLRB’s deliberations on a new joint employer rule. Click here to read more about how to comment and here to learn more about the NLRB’s joint employer standard.