WASHINGTON — A change in how the National Labor Relations Board determines whether a company is considered a “joint employer” with another company could disrupt relationships among carriers while imposing higher costs on the trucking sector.

Under the new standard, issued by the NLRB on Thursday, a company may be considered a joint employer with another company if the two share one or more of the employees’ “essential terms and conditions of employment,” now defined exclusively as:

• Wages, benefits and other compensation.
• Hours of work and scheduling.
• The assignment of duties to be performed.
• The supervision of the performance of duties.
• Work rules and directions governing performance of duties and grounds for discipline.
• The tenure of employment, including hiring and discharge.
• Working conditions related to the safety and health of employees.

In comments filed with the NLRB’s proposed rule last year, the American Trucking Associations was particularly concerned with including workplace safety and health as one of the determining conditions for a joint-employer relationship, given that many motor carriers have contractual provisions with other motor carriers that require compliance with federal health and safety standards.

“This will, of course, necessitate a wholesale review of those contracts due to the accompanying risk associated with being deemed the employer of another’s employees — especially when there is no or limited ability to control those employees,” ATA stated.

Asked to comment on the final rule, ATA stated that, “as expected, it largely reflects” what NLRB initially proposed.

“Although the Board recognized that requiring compliance with health, safety and other regulations does not alone constitute a joint employer relationship, there are still aspects of this rule that will limit flexibility for trucking businesses and our industry’s ability to keep the supply chain moving,” ATA stated.

Donald Vogel, a partner with the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary, did not wholly agree with ATA’s assessment of the final rule. He pointed out that while the rule identifies a set of essential terms and conditions, it also states that “an entity need only share or co-determine a single term or condition to be considered a joint employer,” Vogel said.

“What is more, the entity will be implicated as a joint employer not only for the actual exercise of authority over one or more conditions of employment, but also for indirect and even unexercised authority.

“As such, if a contract exists which gives the putative employer the authority to exercise control even though that control is never exercised, under the new rule that contractual term will likely be enough to support a finding of joint employer.”

The NLRB’s change in what it considers to be joint-employer status also opens the door for employers being liable for each other’s unfair labor practices, as overseen by the National Labor Relations Act.

“More companies found to be joint employers could be pulled in and required to negotiate with a unionized workforce and face liability for unfair labor practices,” Vogel said. “So if you’re determined to be a joint employer and forced to bargain with a union over terms and conditions that didn’t previously apply, it’s going to increase your operational costs.”

The effective date of the new rule is Dec. 26, 2023, and the new standard will only be applied to cases filed after that date. The NLRB noted, however, that because it is classified as a major rule it is subject to congressional review, which could result in the effective date being postponed or the rule being withdrawn.

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Original story by FreightWaves Washington Correspondent John Gallagher and is available at freightwaves.com/news/nlrb-joint-employer-rule-triggers-fears-of-higher-trucking-costs.