Employer's Liability Lessened By NLRB Decision

The National Labor Relations Board (NLRB) has reversed an Obama-era decision that potentially exposed employers for the labor law violations committed by their subcontractors. In a 3-2 decision, the board stated that to be classified a “joint employer,” jointly liable for labor violations, a business must have a direct and immediate connection to the employees in question. 

The decision reverses a shift made by the NLRB in 2015 in the case of Browning-Ferris Industries. In that case, the NLRB said a business could be classified a joint employer even if its relationship to the employees in question were indirect. 

In a statement, NLRB said in all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised direct and immediate control over essential employment terms of another entity’s employees.

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