Federal Spotlight: Court Rules Against Obama-Era Joint Employer Rule
January 3, 2019
The D.C. Circuit Court of Appeals ruled last Friday the joint employer standard, which was vastly expanded under the Obama administration, was too broad and must be rewritten. The court said the 2015 Browning Ferris decision by the National Labor Relations Board (NLRB), which made companies and franchisors more liable for the actions of their contract workers or franchisees, was too vague in defining “indirect control” and must be narrowed in scope. Under the 2015 decision, a company or franchisor could be held liable for labor issues occurring under another company or franchisee if it has “indirect control” over that business’ employees.
The NLRB issued a new ruling in September, which redefined the joint employer standard back to a pre-Browning Ferris definition, which says companies with “direct control” over employees could be at risk for employer labor violations. That decision had to be vacated because one member was declared to have a conflict of interest. The board is expected to issue a final rule this June. The Circuit Court remanded the 2015 decision back to the board for a more confined explanation.