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.

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.