As featured in #WorkforceWednesday: This week, we’re elaborating on the National Labor Relations Board’s (NLRB’s) controversial joint-employer rule:
The joint-employer rule published by the NLRB on October 26 expanded the definition of the rule in ways that will likely have a major impact on the workplace. However, a recent postponement means that the rule will not take effect until February 26, 2024.
Epstein Becker Green attorneys Steven M. Swirsky and Erin E. Schaefer tell us the implications this rule may have for employers and how a flurry of legal challenges ...
As featured in #WorkforceWednesday: This week, we’re detailing the National Labor Relations Board’s (NLRB’s) expanded “joint employer” definition, the recent confirmations of the Equal Employment Opportunity Commission’s (EEOC’s) General Counsel and the Department of Labor’s (DOL’s) Wage and Hour Administrator, and President Biden’s executive order on artificial intelligence (AI).
NLRB Expands Definition of “Joint Employer"
The NLRB recently published its long-awaited final rule, setting a new test for determining joint-employer ...
On October 26, 2023, the National Labor Relations Board (NLRB or “Board”) issued its Final Rule (the “Rule”) on Joint-Employer status under the National Labor Relations Act (NLRA). Slated to take effect on December 26, 2023, the Rule returns to and expands on the Obama era Browning-Ferris test, scrapping the NLRB’s 2020 Joint Employer test for the sole reason that the current Board disagrees with the 2020 test, and setting up a potential showdown with the Supreme Court over the “major questions” doctrine and the scope of the NLRB’s administrative authority.
The ...
Over the past few years, lower courts in Massachusetts have grappled with determining whether the “ABC test” under the independent-contractor statute provides the proper framework for assessing joint-employment liability. The Supreme Judicial Court (SJC) has finally answered that question. On December 13, 2021, in Jinks v. Credico (USA) LLC, the SJC held that the independent-contractor statute’s “ABC test” does not apply and instead adopted the Fair Labor Standards Act’s (FLSA) “totality of the circumstances” approach to joint employment.
Credico was a client broker for independent direct marketing companies. It contracted with DFW Consultants, Inc. (DFW) to provide sales and marketing services for its clients in Massachusetts. To provide those services, DFW hired three of the plaintiffs – Kyana Jinks, Antwione Taylor, and Lee Tremblay – as salespeople. DFW classified Jinks and Taylor as independent contractors and Tremblay as an employee.
On September 8, 2020, a federal district court struck down the U.S. Department of Labor’s (“DOL”) Final Rule on joint employer liability, concluding that the Rule violated the Administrative Procedure Act (“APA”) by impermissibly narrowing the definition of joint employment under the Fair Labor Standards Act (“FLSA”), departing from the DOL’s prior interpretations on joint employment without adequate explanation, and otherwise being arbitrary and capricious. We previously blogged about the details of the Final Rule here. The DOL published the Final Rule in ...
With the March 16, 2020 effective date of the new rule interpreting joint employer status under the Fair Labor Standards Act (“FLSA”) almost upon us, employers should brush up on the updated guidance and review their relationships with workers to ensure compliance. Otherwise, they may face the expensive possibility of being held jointly and severally liable under the FLSA for all of the hours the individuals worked in the workweek, including hours worked for a different company.
The New Rule
A joint employment relationship may arise under two potential scenarios.
Scenario 1: ...
The National Labor Relations Board has announced the issuance of its final rule governing joint-employer status. The new rule, which was first proposed in September 2018 and has been the subject of extensive public comment, will become effective April 27, 2020.
The critical elements for finding a joint-employer relationship under the new rule is the possession and the exercise of substantial direct and immediate control over the terms and conditions of employment of those employed by another employer. The essence of the new rule is described in the Board’s February 25, 2020 press ...
Our colleagues Adriana S. Kosovych, Jeffrey H. Ruzal, and Steven M. Swirsky at Epstein Becker Green have a post on the Hospitality Labor and Employment Law blog that will be of interest to our readers: “DOL Proposes New Rule to Determine Joint Employer Status under the FLSA.”
Following is an excerpt:
In the first meaningful revision of its joint employer regulations in over 60 years, on Monday, April 1, 2019 the Department of Labor (“DOL”) proposed a new rule establishing a four-part test to determine whether a person or company will be deemed to be the joint employer of persons ...
Our colleague Steven Swirsky is featured on Employment Law This Week - DOL Proposes New Joint-Employer Rule speaking on the recent Department of Labor (DOL) ruling regarding joint-employers status under the Fair Labor Standards Act while the The National Labor Relations Board's (NLRB) joint-employment rule proposed in September 2018 is still pending.
Watch the interview below.
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If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
My colleagues and I have posted on Epstein Becker & Green, P.C.’s Hospitality Labor and Employment Law blog concerning the U.S. Department of Labor’s Proposed New Rule to Determine Joint Employer Status under the Fair Labor Standards Act. In its proposed new rule, the DOL notes that the National Labor Relations Board is also engaged in rulemaking to set new standards for determining joint employer status under the National Labor Relations Act. Our blog post discusses the similarities and differences between the two proposed rules.
In the first meaningful revision of its joint employer regulations in over 60 years, on Monday, April 1, 2019 the Department of Labor ("DOL") proposed a new rule establishing a four-part test to determine whether a person or company will be deemed to be the joint employer of persons employed by another employer. Joint employer status confers joint and several liability with the primary employer and any other joint employers for all wages due to the employee under the Fair Labor Standards Act ("FLSA"), and it’s often a point of dispute when an employee lodges claims for unpaid wages or ...
Since 2015, employers have faced continued uncertainty regarding which standard the National Labor Relations Board (“NLRB” or the “Board”) will apply when determining joint-employer status under the National Labor Relations Act (“NLRA”). Businesses utilizing contractors and staffing firms or operating in partnering arrangements, as well as those engaged in providing temporaries and other contingent workers, have faced a moving target before the Board when it comes to potential responsibility in union recognition, bargaining obligations, and unfair labor ...
The National Labor Relations Board has announced publication of a proposed rule that will establish a new and far narrower standard for determining whether an employer can be held to be the joint-employer of another employer’s employees. The rule described in the Notice of Proposed Rulemaking published in the Federal Register on September 14, 2018, will, once effective essentially discard the Board’s test adopted in Browning-Ferris Industries (“Browning-Ferris”) during the Obama Administration, which substantially reduced the burden to establish that ...
On Wednesday, the Senate narrowly confirmed John Ring, a management-side labor attorney from Morgan Lewis & Bockius LLP, to the National Labor Relations Board (“NLRB” or the “Board”). With this vote, Ring fills the last remaining open seat on the Board, which was previously held by former Chairman Philip Miscimarra. Ring’s term will expire on December 16, 2022. The confirmation vote of 50-48 was largely down party lines, with only two Democrats voting in favor of Ring’s confirmation. The strong opposition from the Democrats is likely due to the perceived efforts of the ...
On February 26, 2018, in a unanimous decision by Chairman Marvin Kaplan and Members Mark Pearce and Lauren McFerren, the National Labor Relations Board (“NLRB” or the “Board”) reversed and vacated its December 2017 decision in Hy-Brand Industrial Contractors, Ltd. (“Hy-Brand”), which had overruled the joint-employer standard set forth in the 2015 Browning-Ferris Industries (“Browning-Ferris”) decision. The decision followed the release of a finding that a potential conflict-of-interest had tainted the Board’s 3-2 vote. What this means, at least for ...
In the months following Donald Trump’s inauguration, those interested in the National Labor Relations Board (“NLRB” or “Board”) waited anxiously for the new President to fill key positions that would allow the Board to reconsider many of the actions of the past eight years. Over the last six months, the Board has begun to revisit, and overrule, several union-friendly and pro-employee Obama-era Board decisions. The Board’s new General Counsel has also given clear guidance as to where else employers can expect to see his office pursue further changes in how the National ...
The House of Representatives recently passed the Save Local Business Act (H.R. 3441), which marks an important step in the campaign to reverse the Board’s controversial loosening in Browning Ferris Industries of the long standing tests for determining whether two businesses are joint employers expansion and share bargaining obligations and liability for each other’s actions. The measure seeks to protect businesses with staffing, franchise and other contractual relationships from liability and union bargaining obligations for another business’ workers unless one ...
Ever since the National Labor Relations Board (“NLRB”) issued its August 2015 decision in Browning-Ferris Industries of California, Inc., holding two entities may be joint employers if one exercises either direct or indirect control over the terms and conditions of the other’s employees or reserves the right to do so, the concept of joint employment has generated increased interest from plaintiffs’ attorneys, and increased concern from employers. Questions raised by the New York Court of Appeals in a recent oral argument, however, indicate that employers who engage ...
By appointing Philip Miscimarra, who has served as a Member of the National Labor Relations Board (“NLRB” or “Board”) since August 2013, to serve as Acting Chair of the agency, President Donald Trump has taken the first step in what will undoubtedly be an ongoing process to change the National Labor Relations Board. Chairman Miscimarra is the only Republican currently serving on the Board. Mark Gaston Pearce, who has served as chairman, a Democrat who has served as chairman since 2011 and as a Board Member since 2010, will continue to serve under his appointment which expires in ...
Claims that employees have been misclassified as independent contractors remain a focus for private plaintiffs and government agencies. Contracts that exert control over the business of another company may be a particularly fertile source of misclassification claims by plaintiffs seeking unpaid wages.
Two recent suits arising from franchise agreements with Jani-King, described by the Third Circuit as “the world’s largest commercial cleaning franchisor,” demonstrate the potential liability that can arise under these circumstances.
Wage Hour Division Sues Based on ...
This past week, Doctor’s Associates Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into a Voluntary Agreement (the “Agreement”) with the US Department of Labor’s (DOL) Wage and Hour Division “as part of [Subway’s] broader efforts to make its franchised restaurants and overall business operations socially responsible,” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.
While the ...
The National Labor Relations Board (“NLRB” or “Board”) announced in its 3-1 decision in Miller & Anderson, 364 NLRB #39 (2016) that it will now conduct representation elections and require collective bargaining in single combined units composed of what it refers to as “solely employed employees” and “jointly employed employees,” meaning that two separate employers will be required to join together to bargain over such employees’ terms and conditions of employment.” To understand the significance of Miller & Anderson, one must consider the Board’s ...
The DOL has been steadfast in expanding worker coverage under the Fair Labor Standards Act (“FLSA”), and the financial services industry, like most, will be affected. The DOL’s initiative began on July 6, 2015, when it published a Notice of Proposed Rulemaking (“NPR”) that is expected to extend overtime protection to almost five million white-collar workers who are currently not entitled to overtime pay because they are classified as exempt. The NPR, which is expected to be finalized in July 2016, will likely more than double the salary threshold to qualify for FLSA ...
[caption id="" align="alignright" width="98"] Jang Hyuk Im[/caption]
My colleague Jang Hyuk Im, a Member in the firm’s San Francisco office, authored an article in Law360 titled “Steps for Avoiding Unexpected Joint Employer Liability.” (Read the full version – subscription required.). I thought you might find Jang’s article of interest particularly given recent media coverage about the outsourcing of domestic IT jobs and legal challenges facing employers.
Following is an excerpt:
The long-term expense and economic effects of maintaining a full-time workforce ...
Our colleagues Jeffrey H. Ruzal, Steven M. Swirsky, Joshua A. Stein, Brandon C. Ge, Adam C. Solander, and Valerie Butera contributed to Epstein Becker Green’s recent Take 5 newsletter. In this edition, we address important employment, labor, and workforce management issues in the hospitality industry:
The National Labor Relations Board (“NLRB” or “Board”) has issued its long-anticipated decision in Browning-Ferris Industries, 362 NLRB No. 186 (pdf), establishing a new test for determining joint-employer status under the National Labor Relations Act (“NLRA” or the “Act”). Because this revised standard will resonate with businesses relying on contractors and staffing firms throughout the economy and across industry lines, employers should be wary of its potential impact upon relationships with service providers that are supportive of, or critical to ...
The National Labor Relations Board has issued an Order (PDF) denying a request for a special appeal filed by McDonald’, USA, LLC and its franchisees (collectively referred to as “McDonald’s” in the Board’s Order) and found that the Administrative Law Judge presiding in the unfair labor practice hearing did not err when she denied McDonald’s motion for a bill of particulars explaining the factual basis for the General Counsel’s claim that McDonald’s, USA, LLC and the named franchisees are joint employers.
The ALJ Had Denied McDonald’s Motion for a Bill of ...
NLRB General Counsel Richard Griffin announced on Tuesday July 29th that he has authorized issuance of Unfair Labor Practice Complaints based on 43 of 181 charges pending against McDonald’s, USA, LLC and various of its franchisees, in which the Board will allege that the company and its franchisees are joint-employers. If the General Counsel prevails on his theory that McDonalds is a joint employer with its franchisees, the result would be not only a finding of shared responsibility for unfair labor practices, but could also mean that the franchisor would share in the ...
By Michael Kun
You run a supermarket. You contract with a janitorial company to come in every night to clean the aisles after you close.
You run an ad agency. You retain a contractor to handle your mailroom.
You run a law firm. You bring in a company to update the books in your law library.
You run a hotel. You contract with a van service to shuttle your guests to and from the airport.
Whatever business you are in, you are bound to enter into contracts with vendors to provide a variety of services.
And, except where they subcontract that work out, each of those vendors uses its employees to fulfill ...
Recent Updates
- Watch: Change Is Coming from the EEOC—but When? - Employment Law This Week
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- Attention Connecticut Warehouse Employers: Deadline for New Quota Notices Approaching
- New Jersey Department of Labor’s Guidance Clarifies Expanded Job Protected Leave Rights for Employees