Commentary: Late last week, the National Labor Relations Board published a decision that will make many business leaders’ heads spin. By pronouncing a new legal standard to be used to determine if a business is a “joint employer” of another’s employees, the board has created an unprecedented amount of uncertainty for all types of businesses. Under this new standard, employers may have new obligations and liabilities under federal labor law in relation to employees of a variety of other companies with which they do business — their contractors, their suppliers, their franchisees, their subsidiaries, and more.
The board’s new “joint employer” standard is incredibly broad and vague. In recasting the joint employer test, the board rejected a 30-year old legal standard that focused on the actual exercise of direct control over another business’ employees.
