The wait is over: This morning the NLRB announced that it will issue its final rule governing joint-employer status tomorrow, February 26, 2020. According to the NLRB itself, the “final rule restores the joint-employer standard that the Board applied for several decades prior to the 2015 decision in Browning-Ferris, but with greater precision, clarity, and detail that rulemaking allows.”

Specifically, the final rule provides:

To be a joint employer under the final rule, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees. The final rule defines key terms, including what are considered “essential terms and conditions of employment,” and what does, and what does not, constitute “direct and immediate control” as to each of these essential employment terms. The final rule also defines what constitutes “substantial” direct and immediate control and makes clear that control exercised on a sporadic, isolated, or de minimis basis is not “substantial.”

NLRB Chairman John R. Ring said in a press release, “With the completion of today’s rule, employers will now have certainty in structuring their business relationships [and] employees will have a better understanding of their employment circumstances[.]”

The final rule will be effective on April 27, 2020.  This final rule should, for now, end the controversy of who is an employer and drastically decrease concerns about joint employment of a franchisee’s employees by a franchisor. That said, vicarious liability remains a viable theory–especially where third-party harm is alleged–so franchisors must remain vigilant at maintaining the traditional separateness between franchisor and franchisee.

We will be examining the final rule in detail soon, so watch here for updates and details.

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