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NLRB Upends Joint Employer Labor Standard (Again!): CEI Statement

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Abruptly, the National Labor Relations Board (NLRB) today vacated its most recent ruling on joint employer liability, the standard that determines when two employers are considered jointly liable for employment-related policies. Competitive Enterprise Institute labor policy expert Trey Kovacs said this latest action underscores why it’s urgent for Congress to set a standard into law.

The NLRB’s decision to vacate its own recent ruling on joint employer liability now puts greater pressure on the Senate to pass the Save Local Business Act. This turn of events illustrates how no decision by the Board is permanent and why it is crucial for Congress to set a standard into law instead of letting regulators decide. Without a permanent legislative fix, the overly broad and vague Obama-era Browning-Ferris joint employer standard is once again a threat to entrepreneurs and workers nationwide. 

Today's order by the NLRB vacated the Board’s December 2017 decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. that had restored the decades-old standard that American employers relied upon in business-to-business relationships. This latest move was prompted by a determination that a Board member recently appointed by President Trump should not have participated in the decision due to his law firm’s previous work on the Browning-Ferris case.

During the Obama administration, the NLRB’s controversial ruling in a case against waste management company Browning-Ferris broadly expanded joint employer liability. Today’s action by the NLRB reverts the standard back to the Obama-era one.

Related: CEI Joint Employer FAQ