NLRB Formalizes Return of First Trump Joint Employer Rule (1)

The National Labor Relations Board formally reinstated its 2020 rule governing when a company is deemed a joint employer under labor law after a federal court vacated a Biden-era definition two years ago.

The NLRB said in a final rule released Thursday it was replacing the text of the vacated regulation with that of a standard finalized near the end of President Donald Trump’s first term. The 2020 rule requires a company exercise “substantial direct and immediate” control over another firm’s workers to be classified as a joint employer.

The board revised the Code of Federal Regulations—a purely ministerial action that created no practical change—in accordance with a federal judge’s decision that struck down a 2023 rule lowering the bar for finding a joint employer relationship before it ever took effect.

The NLRB continued to apply the tighter standard from the 2020 regulation prior to updating the CFR, including when it found in 2024 that Google jointly employed contract software developers who had unionized. That ruling was vacated by a federal appeals court.

Joint employment has been a divisive topic in labor law chiefly due to its importance for franchise operators and companies that rely on outsourced labor. A business-to-business relationship that triggers a joint employment finding means the firms involved share labor law liability and union bargaining obligations.

In a sign of the issue’s staying power, earlier this week the NLRB ruled on the joint employer status of Browning-Ferris Industries of California Inc. for the third time in a dispute that goes back more than a dozen years.

While the 2020 standard endured through the Biden administration, it’s subject to a Service Employees International Union challenge that’s pending in federal appeals court. If the union prevails, it could force the NLRB to revert to the more labor-friendly standard set in its 2015 decision in Browning-Ferris Industries.