Skip to content

NLRB Update

On Thursday the National Labor Relations Board handed down one of the biggest labor decisions of the Obama administration, ruling a contractor is equally responsible for labor issues committed by its subcontractors.

The NLRB determined that a contractor is a “joint employer” obligated to negotiate with the representative union over workers supplied by subcontractors.

This new standard will have an impact on companies that outsource or supplement their workforce through subcontractors as they could now unknowingly expose themselves to unionization via those subcontractors or temporary workers.

FACTS from the RULING: 
“In the decision, the Board applies long-established principles to find that two or more entities are joint employers of a single workforce if:

(1) they are both employers within the meaning of the common law;  and

(2) they share or co determine those matters governing the essential terms and conditions of employment.

In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will – among other factors — consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.”

To read the full decision, click here:

ABC members should contact their legal counsel, as well as their subcontractors, to discuss this ruling and take proactive measures to protect themselves. If you are in need of legal counsel, please contact our Professional Services Committee for further assistance.