On Dec. 7, ABC submitted comments to the National Labor Relations Board urging the board to withdraw the new proposed joint employer rule and retain the current 2020 NLRB final rule, which provides clear criteria for companies to apply when determining status. In the comments, ABC argued that the new proposed rule will cause great confusion and uncertainty among construction contractors, specifically small business owners. More than 11,000 comments were submitted to the docket.
ABC explains in the comments that the board’s radical proposal dramatically expands the joint-employer standard beyond the limits of the common law. “The board’s new proposal greatly expands joint-employer liability by restoring—and then exceeding—the Browning-Ferris Industries standard, which deems two entities joint employers based on the mere existence of reserved joint control, indirect control or control that was limited and routine,” ABC stated.
Further, the comments state, “The proposed rule goes even further than the BFI case by making clear that indirect or reserved control standing alone may be sufficient to prove joint-employer status. 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’s comments also made the following arguments:
- The proposal will disrupt long-established operational methods by which construction service providers work together to build America;
- The proposed rule, if implemented, would violate the Administrative Procedure Act;
- The proposed rule will harm the collective bargaining process in the construction industry;
- The proposed rule violates the “major case” doctrine and constitutionally required separation of powers;
- The proposed rule will harm small businesses in the construction industry; and
- The absence of clear guidance in the proposed rule will cause great confusion and uncertainty for construction contractors.
ABC also joined the comments submitted by the ABC-led Coalition for a Democratic Workplace.
Background on the new proposed NLRB rule:
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.”
ABC was a vocal opponent of the expanded definition of joint employer that was created by the NLRB’s 2015 Browning-Ferris Industries 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.”
On Oct. 14, the NLRB announced it was extending the comment deadline from Nov. 7 to Dec. 7 in order to allow sufficient time for parties to file initial comments.
On Oct. 20, ABC participated in the U.S. Small Business Administration’s Office of Advocacy virtual roundtable on the 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.
The ABC-led Coalition for a Democratic Workplace created a grassroots toolkit to tell the NLRB to abandon its radical joint employer proposed rule. The toolkit provided an explanation of the rulemaking and a ready-to-send letter to the NLRB explaining why the new joint employer standard would be disastrous.
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.