Why the NLRB’s New Proposed ‘Joint-Employer’ Standard Is a Win for U.S. Manufacturing Workers

On Friday, the National Labor Relations Board (NLRB) took important action that will help manufacturers, workers and our economy by creating a more reliable and workable “joint-employer” standard (i.e., the legal test for determining if more than one entity is the individual’s “employer” and thus liable for labor law violations). This represents a sharp and positive departure from the Obama NLRB’s Browning-Ferris Industries (BFI) decision in 2015.

That NLRB action, which upended 30 years of labor law, threatened not only thousands of mom-and-pop small business franchises around the country but countless manufacturers as well. In particular, it exposed manufacturers to immeasurable increased liability for the employees of a subcontractor even though they exercise little to no control over them. Accordingly, individuals involved in the manufacturing and distribution processes began to shift from clearly understanding what the rules were to wondering who their boss even was—and many manufacturers struggled with similar uncertainties, the kinds of things that can make it almost impossible to run a business effectively.

It is for reasons like these that the NLRB took action to replace this decision with a more lasting and dependable rule. Under the Board’s proposal, a joint-employer relationship would only be found where employers “possess and actually exercise substantial direct and immediate control” over employees’ conditions of employment like hiring, firing, discipline and supervision. It’s logical. It’s common sense. It’s a positive step, and it will help bring back certainty to American manufacturers. Now, it’s up to the public to submit feedback on this new proposal so the NLRB can consider it as the Board works to finalize its new, more workable standard. The National Association of Manufacturers certainly plans to do so, and we applaud the NLRB for taking this important step.

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