NLRB Confirms That It Intends To Proceed With Rulemaking On Joint Employer Standard
On June 5, 2018, in response to a May 29, 2018 letter from Sen. Elizabeth Warren (D-MA), Sen. Bernard Sanders (I-VT), and Sen. Kirsten Gillibrand (D-NY), National Labor Relations Board (“NLRB” or “Board”) Chairman John Ring confirmed that the NLRB intends to move forward with rulemaking on the joint employer standard and that a Notice of Proposed Rulemaking will be issued by the summer. Chairman Ring’s response comes only one month after the NLRB announced in May that it was merely considering rulemaking on the issue.
By way of background, the Board’s December 2017 Hy-Brand decision overruled the controversial joint employer standard that was announced in Browning-Ferris Industries, 362 NLRB No. 186 (2015). However, the Hy-Brand case was vacated by the NLRB on February 26, 2018, for an alleged conflict of interest due to Board Member Emanuel’s participation in the case, leaving the Browning-Ferris standard intact. (A detailed discussion of the Browning-Ferris and Hy-Brand decisions can be found here.)
In a May 29, 2018 letter to Chairman Ring, Senators Warren, Sanders, and Gillibrand expressed “strong concerns” that the Board’s rulemaking would “undermine labor rights clarified by the Board” in Browning-Ferris, and that the NLRB would do so in order “to evade the ethical restrictions that apply to adjudications.” Citing the timing of the announcement to engage in rulemaking, which came a few months after the Hy-Brand decision was vacated, the Senators accused Chairman Ring of trying to achieve the outcome that the Board was unable to obtain through adjudication. The Senators also accused Chairman Ring of impermissibly prejudging the issue, and even went as far as to allege that he engaged in economic analysis in violation of federal law.
In Chairman Ring’s June 5, 2018 response, he announced that the Board was moving ahead with rulemaking on the joint employer standard, as well as an upcoming “comprehensive internal ethics and recusal review.” Chairman Ring also addressed some of the benefits of rulemaking: it will enable the Board to provide more guidance and certainty (as the new rule will only apply prospectively) to the employer and union communities and will eliminate any concerns about ethical restrictions on pending cases. Finally, after stating that he had not prejudged the issue, Chairman Ring closed his letter by admitting that he is not “devoid of opinions” on the subject of the joint employer standard, nor is he required to be.
Stay tuned as we continue to monitor developments in this area.