Congressional Bill: Joint Employer Liability May Become More Limited
The EPL industry rightfully has been concerned about the NLRB’s and courts’ expansion of liability from the seeming employer to those with relationships to that entity. Franchisors increasingly were exposed to liability for franchisees’ alleged misconduct and contractors were being served with lawsuits alleging discrimination by subcontractors or staffing agencies. This expansionist trend may be reversing. The U.S. House Education and the Workforce Committee, on October 4, approved the Save Local Business Act (H.R. 3441). The U.S. Senate is considering the bill. If enacted into law, this Act would limit the extent to which businesses can be considered “joint employers” under NLRB standards. Under the bill, entities such as subcontractors would be considered a joint employer with the contracting entity only where one exerts “direct, actual and immediate” control over the employee policies of the other. H.R. 3441 effectively seeks to reverse the NLRB’s decision in Browning-Ferris Industries of California, 362 NLRB No. 186 (2015), in which the Board held that entities are joint employers where one exercises even indirect control over the policies of the other. Meanwhile, the U.S. Court of Appeals for the D.C. Circuit is considering an appeal of Browning-Ferris and is expected to issue its decision shortly.