A Washington, DC, district court on Friday directed the National Labor Relations Board to revisit its “joint employer” standard and more fully explain its reasoning for applying the rule to a case dating back to 2013.
Friday’s decision comes as the board works to issue a rule that would change the definition of joint employer under the National Labor Relations Act. Issuing the rule was high on board’s to-do list, according to a list of rulemaking priorities it released in June. The proposed rule, of interest to long-term care providers that use temporary or contract workers as well as operators that are part of franchises and others, was expected in July but has not been announced yet.
The 2015 ruling in the Browning-Ferris case referenced by the district court on Friday established a more “union-friendly standard” than earlier interpretations, Reuters reported. At that time, the NLRB had ruled in favor of the union and “adopted a new standard that said companies are joint employers when they can indirectly control working conditions.”
Business owners were opposed to the decision.
The same court in 2018 determined that the NLRB had not explained well enough its reasoning in determining what constitutes “indirect control” with regard to joint employer status and handed the case back to a lower court. And then a 2020 interpretation tended to favor business owners over employees under the joint employer rule.
“The NLRB precedent on the joint-employer standard was anything but static,” the judicial panel stated on Friday.
The court didn’t nullify NLRB’s decision-making rights, and the board “is free to change its mind. But the board must acknowledge when it is doing so and explain its reasoning,” the decision reads.
The three-judge panel included Circuit Judges Robert Wilkins and Patricia Millett as well as Supreme Court Justice Ketanji Brown Jackson. Jackson sat in on the proceedings but did not have a voice in Friday’s decision, according to Reuters.
