Expanded Labor Board co-employer rule for manufacturers

In December 2021, the National Labor Relations Board (NLRB) announced that it would publish draft regulations on the standard for determining whether two employers are “co-employers” under the National Labor Relations Act. work (NLRA). Now is the time for manufacturers to prepare.

To qualify as a joint employer under current law, an employer must have “substantial direct and immediate control” over one or more “essential terms and conditions of employment” of employees of another employer, such that “the entity significantly affects employment issues”. of these employees. NLRB Rules and Regulations, § 103.40.

The NLRB should return to its former Browning Ferris standard or enact a similar rule. Under the Browning Ferris standard, entities were deemed joint employers if they possessed the ability to indirectly control the terms and conditions of employment of an employee of another employer, even if the entity never actually exercised that ability. Browning Ferris Industries362 NLRB 1599 (2015).

restore the Browning Ferris the co-employer standard, or the issuance of a similar rule, could significantly affect employers in the manufacturing industry, especially as many manufacturers are grappling with labor shortages and use third parties, such as recruitment agencies, to meet their staffing needs. Among other outcomes, a joint employer finding would make both entities liable for the other’s unfair labor practices.

Manufacturers can take several steps now to prepare for the likely return to a broader co-employer standard. First, manufacturers should work with staffing agencies to address workplace issues and pay as much attention to working conditions for temporary employers as for regular employees.

Second, and importantly, employers should review all third-party contracts and procedures associated with staffing arrangements to understand the direct or indirect contractual right to control the terms and conditions of employment of temporary employees. In many cases, it may be in the interest of the employer to ensure that contractors have as much autonomy as possible in setting terms and conditions of employment, lest they be viewed as co-employers. Employers should also review these contracts and procedures to understand responsibility for decisions and how responsibility for workers’ claims will be allocated between the parties.

Third, manufacturers must develop or maintain a good working relationship with its staffing agency that includes regular communication between the parties about issues that arise and must create a plan to jointly investigate worker complaints.

© 2022 Jackson LewisNational Law Review, Volume XII, Number 55

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