Federal court in Texas nixes NLRB rule on joint employee status

al impact.

“The rule makes it easier for the agency to declare joint employment status exists in business relationships where it traditionally doesn’t, like franchising, contracting, and supply chains,” the chamber said. “It upends a longstanding precedent by broadening liability for employers and enabling unions to organize across companies rather than store by store. Many companies could find themselves facing liability for workers they don’t employ and workplaces they don’t actually control.”

Figuring out who is an employer is not a new issue; as the judge’s decision notes, “it has been the subject of litigation since the early days of the [1935 National Labor Relations] Act.” In a review of past litigation, Barker says the body of law has established that an employee can have multiple employers.

Prasad Sharma, a partner at the trucking-focused Scopelitis law firm, said the NLRB rule broke with precedent on the issue of control, leading to the judge’s decision.

Common law rule was “fairly well settled,” Sharma said. “Joint employment required direct and immediate control.” But the more indirect definition of control in the NLRB rule “is what the court found to be nebulous and potentially leading to all kinds of arrangements beyond what the common law would have afforded as joint control.”

Potential impact on trucking

At the time of the NLRB approval of the new standards, the PrePass alliance, in its blog, gave an example of how joint employment could impact trucking. It cited an instance in which a motor carrier and a staffing agency both provided a driver, or in which one carrier contracts with a second carrier to move freight. (Although the blog did not mention double brokering, that could be an instance of legitimate, rather than fraudulent, double brokering.)

Source: freightwaves.com