NLRB Restores Joint-Employer Standard In Final Rule

Trucking companies are expected to benefit from a new federal rule aimed at more clearly defining what constitutes joint-employer relationships.

The National Labor Relations Board (NLRB) will issue the rule Wednesday, and it is expected to go into effect April 27, barring a court challenge.

The final rule restores a standard for determining joint-employer status that had been applied for several decades before 2015, the NLRB stated in a news release, but with "greater precision, clarity, and detail."

Under the final rule — which received over 29,000 comments during a comment period initiated in October 2018 — an entity may be considered a joint employer of another employer's employees "only if the two share or co-determine the employees' essential terms and conditions of employment," with those eight terms and conditions defined exclusively as wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction.

"With the completion of today's rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship," NLRB Chairman John Ring stated.

For trucking companies, the ramifications of a joint-employer relationship would come up often in the case of strike situations, according to Jack Finklea, a labor law specialist at the law firm Scopelitis Garvin, Light, Hanson & Feary.

"A union's picketing of a primary motor carrier or other business can bleed over into the motor carrier employer if a joint employment relationship exists," Finklea told FreightWaves. In addition, he said, if two trucking companies are on same site and they are deemed joint employers, then each one can be responsible for the other's unfair labor practices.

"Going forward, trucking companies stand to benefit from the final rule, as the NLRB will review cases with a new higher standard of what defines that joint-employer relationship."

Finklea advised motor carrier employers to look at each of the eight factors in the new rule that constitutes "direct and immediate control" and apply them to their workforce and any surrounding workforce with which they come in contact.

"Carriers should ensure they are not falling within one of those enumerated circumstances listed in the new regulations," Finklea said. "Otherwise carriers risk a finding by the NLRB that they are in a joint employment relationship, which could make them susceptible to a union picket line, or which could make them responsible for another company's unfair labor practices – which could certainly cost them money."

The International Brotherhood of Teamsters, which pointed out that the 2015 NLRB decision known as Browning-Ferris, which the new rulemaking overrides, was a case involving the Teamsters.

"We are deeply disappointed in this decision, which will have a negative and tangible impact on hard working Americans," the union said in a statement to FreightWaves. "The [Browning-Ferris] ruling … protects millions of workers from manipulations by companies calculated to impair employee rights by playing shell games over what entity in fact controls their working conditions. Rolling it back will cause great harm."