More than they bargained for? Companies may have union obligations under NLRB final rule
More companies could find themselves at the union bargaining table under a new final rule from the National Labor Relations Board (NLRB).
On October 26, the NLRB established a new standard making it easier for the board to determine that a company is a joint employer.
As a joint employer, a company may be obligated to bargain with a union over essential terms and conditions of employment. In addition, joint employers are each responsible for making sure laws are followed and could be liable for labor law violations committed by the other business or businesses they’re connected to.
When would a company be a joint employer?
A joint employer situation could exist when two or more companies have control over a group of employees. This could apply to contractors and subcontractors, staffing companies, or franchisors and franchisees.
Under the previous ruling from the NLRB, companies needed to have direct control over employees for a joint employer relationship to exist.
The new final rule says indirect control could be enough to give a business joint employer status. Two or more companies could be joint employers if they:
- Each have an employment relationship with employees and
- Share or codetermine one or more of the employees’ essential terms and conditions of employment.
More union responsibilities
When a company is a joint employer with a company that has a union, it may find that it needs to consider:
- A duty to bargain over essential terms and conditions of employment, as well as other mandatory bargaining subjects under its authority,
- That picketing directed at a joint employer would likely be considered lawful.
When does this take effect?
The new joint employment standard takes effect on December 26, 2023, and will be applied to cases filed after this date.
Key to remember: Joint employers may face additional union obligations under a final rule taking effect in December, 2023.