NLRB to Revisit Issue of Whether Company That Uses Workers Supplied by a Third Party Is Their "Joint Employer"

June 06, 2014

The National Labor Relations Board has announced that it will consider changing the standards for determining whether a company that uses a third-party service provider is the joint employer of that provider's workers if they seek to form a union.  Organized labor has complained about the long-standing rules in this area which examine whether both companies "share the ability to control or co-determine essential terms and conditions of employment."  Labor contends that the rule should instead look at whether the client company has "indirect control" over those conditions and is the employer, at least in part, as a matter of "economic reality."  In the case before the Board, the union represents the 60 permanent employees at a recycling facility and is seeking to obtain an election among 240 sorters, employed by a different company, performing work at the facility.  The union is asserting that, if it wins, both the recycling company and the sorters' employer would have to bargain with the union.  In addition to companies using staffing firms, other examples of where the case could have implications is with computer professionals and skilled maintenance services as well as any situation where large numbers of union and non-union employees are working side-by-side.