Agencies begin launching regulatory initiatives

Even before the midterm elections and the prospect of divided government, the Biden administration began issuing new regulations in the employment sector.

Joint employer
The National Labor Relations Board (NLRB), which had already proven its willingness to be at the forefront of overtly “proworker” actions, published a proposed regulation defining joint employers in September 2022. The Board’s proposed rule adopts similar proposals made during the Obama administration. This topic is among the most hotly debated and litigated areas of employment law, with still-unresolved court cases reaching back to 2015.

Despite its convoluted background, the essence of the new regulation is straight-forward: Two or more employers can be deemed to be joint employers when they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” “Share or codetermine” are defined as “possess[ing] the authority to control (whether directly, indirectly, or both) . . . one or more of the employees’ essential terms and conditions of employment.”

The introduction of “indirect control” as a factor is at the core of the heated debate waged in the numerous comments that have been filed. Huge segments of the economy have adopted the franchise model, including fast food, hardware, appliances, and even dry cleaning. Thus, an expansion of the notion of joint employment, which could deem a franchisor responsible for the acts of a franchisee or—more pointedly—subject it to a union campaign and unfair labor practices of a distant operation, would have an enormous impact on the economy.