On Oct. 20, ABC participated in the U.S. Small Business Administration’s Office of Advocacy virtual roundtable on the National Labor Relations Board joint employer proposed rule. ABC expressed disappointment that the NLRB is once again revising its standard for determining joint-employer status, which will cause great confusion among construction contractors, specifically small business owners.
During the roundtable, convened to gather input from small businesses on the proposed rule, ABC explained that the construction industry has long consisted primarily of specialized, separate employers who come together on specific construction projects to achieve the highest degree of productivity, while maintaining their separate status from project to project. Owners, developers, design firms, construction managers, general contractors, subcontractors and staffing agencies, to name only the most common specialties, each play unique roles in the construction process on individual jobsites. Their functions routinely overlap, but they typically remain separate entities with their own workforces.
Further, ABC stated it is unfortunate that the NLRB is taking an ax to the ABC-supported 2020 joint employer final rule. Its new proposal is a radical departure from the final rule, which focused on “direct and immediate control,” providing clear and consistent criteria for companies to apply when determining joint employer status.
The new proposal will greatly expand joint-employer liability by trying to make indirect or even just reserved, unexercised control sufficient to trigger joint employer status. This overbroad joint-employer standard will not only have an adverse impact on our member contractors, but the overall economy.
ABC concluded by stating it plans to submit comments opposing the new proposal by the comment deadline of Dec. 7.
On Sept. 6, 2022, the NLRB announced a new joint employer proposal, which would rescind and replace the ABC-supported 2020 final rule on Joint Employer Status Under the National Labor Relations Act.
ABC issued the following statement on the new proposed rule on Sept. 6:
“It is unfortunate that the Biden NLRB took an ax to the ABC-supported 2020 NLRB joint employer final rule, which provides clear criteria for companies to apply when determining status,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs. “Today we see that the partisan NLRB proposes to greatly expand joint-employer liability under the NLRA, which will cause confusion and impose unnecessary barriers to and burdens on contractor and subcontractor relationships throughout the construction industry. As a result, contractors may be vulnerable to increased liability, making them less likely to hire subcontractors, most of which are small businesses.”
As NLRB members Marvin E. Kaplan and John F. Ring explained in their dissent, the proposed rule “would not merely return the board to the Browning-Ferris Industries standard but would implement a standard considerably more extreme than BFI.” ABC was a vocal opponent of the expanded definition of joint employer that was created by the NLRB’s 2015 BFI decision, and has supported legal and legislative efforts to restore the standard that was in place for more than 30 years.
On Sept. 29, ABC joined the Coalition for a Democratic Workplace and several other organizations in urging the NLRB to extend the comment period to Jan. 6, stating, “Given the expansive nature of the proposed standard and the complexity of issues relating the standard’s impact on employers and other entities in different industries, employers and other parties will require more time to engage in a meaningful evaluation of the proposed standard and to formulate comments that will benefit the Board when giving further consideration to the proposed rule and during any development of a final rule.”
Additionally, CDW created a grassroots toolkit to tell the NLRB to abandon its radical joint employer standard. The toolkit provides an explanation of the rulemaking and a ready-to-send letter to the board explaining why the standard would be disastrous.
In a press release issued on Oct. 14, the National Labor Relations Board announced it is extending the comment deadline on the joint employer proposed rule from Nov. 7 to Dec. 7 in order to allow sufficient time for parties to file initial comments.
In 2019, ABC submitted comments in support of the Trump-era NLRB’s proposed rule, as did the ABC-led CDW.
To learn more about the new NLRB proposal, read ABC general counsel Littler’s analysis, NLRB Proposes New Joint-Employer Standard That Would Dramatically Expand Scope of “Joint Employment” Under the National Labor Relations Act.