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SWACCA Files Comments on NLRB’s Proposed Joint Employer Rule

SWACCA has filed comments on the National Labor Relations Board’s (the Board) proposed rule to establish a new standard for the determination of joint employer status under the National Labor Relations Act (the Act).  SWACCA opposes the proposed rule on the basis that it would induce unscrupulous construction contractors to use labor brokers and other schemes to avoid their obligations under the Act. As a result, it would accelerate the growing use of unlawful business models that undermine SWACCA member contractors.

The Board’s proposed rule would reduce the instances in which two employers are found to be jointly liable under the Act by requiring a putative joint employer to “possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”  The proposed rule would modify current Board law – the Browning-Ferris standard – which supports a joint employer finding where an employer has reserved a contractual right to control the essential terms and conditions of employment of another employer’s employees. 

SWACCA commented that, “The subcontracting scheme with perhaps the most nefarious potential is that involving labor-only subcontractors or ‘labor brokers.’  …  [B]ecause the labor broker himself is not a legitimate construction contractor it is all but certain that control over workers’ essential terms and conditions will be retained by the employer that contracts with the labor broker.  Whether that control is exercised indirectly or directly, and whether that control is limited and routine, are potentially fact intensive questions that are difficult if not impossible to resolve timely to effectuate the Act’s goals of encouraging the practice and procedure of collective bargaining and promoting labor-management stability.” 

The Board’s joint employer rulemaking has received substantial attention with nearly 30,000 comments filed during the extended comment period that began on September 14, 2018.  Adding to the drama, the U.S. Court of Appeals for the D.C. Circuit issued an opinion during the comment period, on December 28, 2018, that was generally supportive of the Browning-Ferris standard and may influence the Board’s rulemaking efforts. 

You can read SWACCA’s comments here.