Under the National Labor Relations Act as defined in 29 U.S. Code § 152, a joint-employer has the same liabilities as an actual employer. However, how the NLRB defines a joint-employer is a highly partisan issue that seems to depend on whether the NLRB has a Republican or Democratic majority.
In 2015, in Browning Ferris Industries, the NLRB ruled that a recycling plant and the agency that provides its housekeeping workers were joint-employers for the purposes of collective bargaining. This is because the plant determines whether to hire and fire agency employees, supervises them, sets their pay, and had ultimate control over their workdays. The standard the NLRB used was whether the employer shares or codetermines matters that are essential to the terms and conditions of employment. Under this standard, for example, McDonald’s would be liable for the actions of its franchisees. Business groups strongly opposed this rule.
The Browning Ferris rule was overturned in 2017 by the NLRB in Hy-Brand, which held that the correct standard was whether or not the employer has direct and immediate control over essential terms and conditions of employment. However, the ruling was overturned in February in a unanimous decision by the NLRB after it found that one of the members had a conflict of interest. The NLRB reintroduced the rule in September and recently extended the comment period until January 22, 2019.
On Friday, December 28, the D.C. Appeals Court overturned the Obama era, joint-employment Standard. In a 2-1 decision, the court held that the NLRB did not properly define the joint-employer standard. An appeal is unlikely as the NLRB will most likely adopt the Hy-Brand standard in the next couple of months.