On October 26, 2023, the National Labor Relations Board (“NLRB” or “Board”) issued its long-awaited final rule establishing a new standard for determining when two employers are joint employers under the National Labor Relations Act. If any two entities are deemed joint employers, both are obligated to bargain with a union that represents the employees. Moreover, each entity is responsible for any unfair labor practice committed by the other and both are subject to demands for recognition and/or an NLRB election.

The final rule, set to take effect December 26, 2023, rescinds and replaces the Board’s previous joint employer rule issued in April 2020. The most significant change under the new rule is the manner in which it alters what is needed to show that two entities share or codetermine employees’ essential terms of employment. The 2020 rule required an entity to possess and actually exercise “substantial direct and immediate control” over one or more of the essential terms. Under the new standard, an entity can be deemed a joint employer if it has authority to control at least one essential term, “whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect, such as through an intermediary.”

Although similar to a previous standard announced in the NLRB’s 2015 decision in Browning-Ferris Industries, 362 NLRB No. 186, the new rule goes considerably further by establishing that mere possession of such authority, alone, is sufficient to find joint employer status.Continue Reading NLRB’s New Joint Employer Test Significantly Expands Circumstances Under Which Separate Entities Will Be Deemed Joint Employers