The U.S. House of Representatives has passed the “Save Local Business Act” (H.R. 3441), which would add a new, narrow definition of “employer” to the National Labor Relations Act (and the Fair Labor Standards Act) and which clarifies the definition of joint employment under both federal statutes.

H.R. 3441 provides that two or more employers only may be considered joint employers if:

[S]uch person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, or administering employee discipline.

(H.R. 3441 also amends the FLSA to incorporate the NLRA’s definition of joint employment by reference.)

H.R. 3441 garnered support from eight Democratic leaders who broke with party lines. H.R. 3441 may encounter difficulty in the U.S. Senate, despite the optimism of Rep. Bradley Byrne (R-Ala.), H.R. 3441’s primary sponsor. Byrne announced that “[t]his is a bipartisan bill and we are dead serious about not just passing it through the House but getting it over to the Senate and getting 60 votes to pass it on the floor of the Senate and send it to the president, who we know will sign it.”

H.R. 3441 is the second legislative effort to roll back the new joint employer scheme announced by the NLRB in Browning-Ferris Industries of California, Inc. v. NLRB, 362 NLRB No. 186 (Aug. 27, 2015). The first, “The Protecting Local Business Opportunity Act” (H.R. 3459/S.2686), was introduced approximately one month after the NLRB decision was issued. While that bill failed to gain majority support in either the House or Senate, H.R. 3441 contains nearly identical proposed amendments to the NLRA.

Prior to the issuance of Browning-Ferris, the NLRB determined whether two separate entities should be considered joint employers by analyzing whether the entities co-determined the essential terms and conditions of employment. TLI, Inc. 271 NLRB 798, 99 (1984). Essential terms and conditions of employment were hiring, firing, discipline, supervision, and direction of employees, and entities’ control over these matters had to be “actual, direct and immediate.” Under these conditions, the NLRB rarely found joint employment. Then came Browning-Ferris.

In Browning-Ferris, the NLRB radically overturned a joint employer standard of more than 30 years. Under the new standard, two or more entities could be considered joint employers if (1) there is a common-law employment relationship with the employees in question and (2) the putative joint employer possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining. Significantly, the right to control, even if it is never exercised, constitutes evidence of joint employment.

Browning-Ferris has sought review of the NLRB’s decision in the D.C. Circuit. Oral arguments were heard on March 9, 2017, and a decision is expected soon.

It is unlikely H.R. 3441 will garner enough Democratic support to pass in the Senate. Nevertheless, H.R. 3441 signals keen Congressional interest in rolling back (or attempting to roll back) a standard that was put in place under the Obama Administration. Even if the bill does not become law, employers can take heart from the fact that, when and if presented with an appropriate case, the newly constituted, pro-business NLRB may overturn Browning-Ferris and return to the TLI standard.

We will continue to monitor developments on the joint employer front.