Industry Fights Expansion of Employer Responsibility for Joint Employees

Modern Apartment Building Copyright Eunika Sopotnicka — Copyright Eunika Sopotnicka

NMHC/NAA joined a coalition gathering support for a letter requesting that the National Labor Relations Board (NLRB) overturn its recent decision to expand the definition of a joint employer. This is when the supervision of an employee’s activity is shared between two or more businesses. The decision could have a significant impact on multifamily firms who may become liable for the actions of subcontractors, suppliers, vendors and temporary staff. That’s because joint employers are required to negotiate with any union representing the jointly employed workers and share liability for National Labor Relations Act violations.

Specifically, the NLRB ruled in the Browning-Ferris Industries case that it could impose joint employer liability when an entity has “indirect” control and “unexercised potential” of control over another entity’s employees. But for 30 years before this ruling entities were designated joint employers when both had “direct and immediate” control over “essential terms and conditions of employment.”

According to two labor board members who dissented, the ruling will “subject countless entities to unprecedented new joint-bargaining obligations that most do not even know they have.” This will include potential liability for unfair labor practices and breaches of collective bargaining agreements. It will also apply to economic protest activity, including what had been unlawful secondary strikes, boycotts and picketing.

Senators Lamar Alexander (R-TN) and John Kline (R-MN) have introduced the “Protecting Local Business Opportunity Act” to overturn the NLRB ruling. The bill would require employers to have “actual, direct and immediate” control over an employee to be considered a joint employer.

NMHC/NAA are strongly supporting and advocating for the Alexander-Kline legislation.

Matthew Berger mberger@nmhc.org

Industry Fights Expansion of Employer Responsibility for Joint Employees

September 23, 2015

Staff Resource

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