By Jon Taets
ALEXANDRIA, Va.—On September 6, the National Labor Relations Board (NLRB) announced its intention to re-write its joint employer rule, which is the rule that determines whether one company can be declared an employer of another company’s worker(s). This is often most easily understood in the context of a franchisor/franchisee relationship, but in the convenience retailing world, even outside the franchise model, it can also include suppliers and/or contractors.
If company A is determined to be a joint employer of company B’s worker, company A could be held jointly liable for labor violations committed by company B and or possibly required to enter into collective bargaining with company B’s workers.
For most of its history, the Board has not had a formal joint employer rule. Rather its decisions were based on case-by-case specifics, and each case could serve as guidance for future cases. That changed in 2020 when the Trump Administration’s NLRB choose to issue a formal rule following litigation surrounding a 2015 Obama Administration NLRB decision that dramatically lowered the threshold for determining joint employer status.
The guidance from the 2015 decision said that if one employer had the right to control one or more item essential to the terms and conditions of another company’s worker, and that said right to control was substantive, then the first employer could be determined to be a joint employer of the second’s worker. That determination could be made even if the first employer only possessed such a right even if they never exercised it.
In 2020, seeking to tighten up and formalize guidance around this issue, the Trump NLRB took the unprecedented step of writing a formal rule which largely reversed the Obama NLRB’s guidance by saying that one company would have to actually exercise such control over a substantive provision essential to the terms and conditions of another company’s worker in order to be determined to be a joint employer.
Now, despite no cases coming before the board that challenge the 2020 rule’s provisions, the NLRB has issued a proposal that would not only rescind the 2020 rule but also significantly expand upon the previous Obama-era guidance. The proposed rule reverts to the “indirect control” standard from the 2015 decision but declares that any right to control even one item that is essential to an employee’s terms and conditions of employment is automatically substantive no matter what it is, again whether or not such a right is actually exercised.
It goes further by defining certain items to be considered essential terms and conditions: “wages, benefits, and other compensation; hours of work and scheduling; hiring and discharge; discipline; workplace health and safety; supervision; assignment; and work rules and directions governing the manner, means, or methods of work performance.” It also goes on to specify that the list is “not exhaustive” and could be expanded either in rulemaking or in case-by-case determinations by the board.
If this proposal were to become final, it could put many convenience stores in jeopardy of being declared joint employers of many contracted workers. For example, if a retailer uses a cleaning company, either at corporate offices or in stores, and has the right to determine what time those cleaners can do their work, where they are allowed to work and/or whether they adequately cleaned the space, the retailer could conceivably be determined to be a joint employer of those workers under this proposal.
In another example, a retailer that set the time of day during which fuel or product deliveries could be made would create a risk of that retailer being found to be a joint employer under this proposal (especially if those delivery drivers place those items on your shelves for you).
NACS will be filing formal comments opposing this rule with the NLRB before the November 7, 2022, deadline and encourages convenience operators to file their own comments as well. The NACS government relations staff is available to help in drafting and filing these statements. Please email email@example.com if you would like assistance.
The 2022 NACS Show, October 1-4 in Las Vegas, features two government relations sessions: What the New Tobacco Signage Requirements Mean for Retailers and Upcoming Elections and What They Mean for Convenience. Register today.
Jon Taets is NACS director, government relations. He can be reached at firstname.lastname@example.org.