The New Jersey Employment Law Firm Blog
“Joint employer” rules help workers and their advocates in situations where more than one person or entity exercises control or authority over a worker. New Jersey employment laws establish obligations that employers owe to their employees. To assert a claim for damages under these laws, an employee must identify which employer or employers have those legal obligations. This issue can arise in disputes over labor rights under the National Labor Relations Act (NLRA), such as when an employee receives a paycheck from one company but works at a site operated by another company under a contract between the two companies. Joint employer rules allow workers to hold employers jointly and severally liable for unlawful practices. The National Labor Relations Board (NLRB) issued a final rule in late 2023 establishing a new standard for joint employment under the NLRA. In March 2024, however, a federal judge vacated the rule.
The NLRA protects employees’ rights to organize themselves, bargain collectively with their employers, and engage in other activities related to advocating for their rights and protecting their interests. Employers may not interfere with or retaliate against employees who are engaging in protected activities. Like many employment laws, the statute only briefly defines “employer,” leaving it to the NLRB to go into detail.
The NLRB’s joint employer rule looks at the amount of control an alleged employer has over a worker’s “essential terms and conditions of employment” (ETCEs). This includes issues like wages or salary, job assignments, supervision, workplace safety, and employment policies. In 2020, the NLRB adopted a rule that would only deem an entity a joint employer if it had “substantial direct and immediate control over one or more” ETCEs. This presents a fairly high bar for employees, which the NLRB sought to address with a revised rule.
The joint employer rule that the NLRB adopted in late 2023 takes a more expansive view of who might be considered an “employer” under the NLRA. Rather than requiring evidence of actual control over ETCEs, it looks at whether an entity has the authority to exercise control. Specifically, it asks whether two entities “share or codetermine” ETCEs. It could be possible, under this rule, for an entity to be a joint employer without ever using its authority over an employee.
The rule’s effective date was December 26, 2023, but opponents filed a lawsuit more than a month earlier. A significant part of the dispute involved whether, as the NLRB argued, the new rule was consistent with common-law principles of agency. Many aspects of employment law derive from the law of agency, which addresses the authority of a principal over an agent.
The plaintiffs moved for summary judgment, which the court granted in March 2024. It held that the new rule was excessively broad, noting it “would treat virtually every entity that contracts for labor as a joint employer.” It cited a 1995 Supreme Court decision, NLRB v. Town & Country Elec., Inc., which held that “under the common law of agency,” an employer “must have the power to control ‘the material details of how the work is to be performed.’” The court’s ruling reinstates the 2020 rule.
If your employer has engaged in unlawful activities and violated your rights in New Jersey or New York, a skilled employment attorney can advise you of your rights and options. Schedule a confidential consultation with the Resnick Law Group today through our website or by calling 973-781-1204 or 646-867-7997.