On October 27, 2023, the National Labor Relations Board’s (“NLRB”) published a final rule broadening the National Labor Relations Act (“NLRA” or “Act”) standard for when two entities that conduct business together will be considered “joint employers.” This new rule takes effect December 26, 2023.
The final rule establishes a new standard for determining whether two employers, as defined in the NLRA, are joint employers of particular employees within the meaning of the Act. The NLRB states the final rule “provide[s] guidance to parties covered by the Act regarding their rights and responsibilities when more than one statutory employer possesses the authority to control or exercises the power to control particular employees’ essential terms and conditions of employment.”
Under the final rule, the new broadened standard is as follows:
An entity may be considered a joint employer of another employer’s employees if the two share or codetermine the employees’ essential terms and conditions of employment.
National Labor Relations Board, Standard for Determining Joint Employer Status. October 27, 2023.
This rule has meaningful implications for charter school employers, charter school management organizations (“CMO”), and other charter organizations that have multiple entities working together, or when third parties are contracted to deliver educational services (or wrap-around services).
For example, under this new broadened standard it will be easier for unions and employees to argue that as joint employers, the entities collectively are liable for one another’s allegedly unfair labor practices. Or, both entities must bargain together with any union that represents the jointly employed workers, and as a result, are subject to union picketing or other economic pressure if there is a labor dispute against any of the other “joint employers.”
Unfortunately, the final rule does not provide clear guidance as to when an entity qualifies as a “joint employer.” As such, the new broadened standard creates ambiguity for charter schools and charter management organizations working with affiliated entities, particularly with regard to whether or not they might be deemed a joint employer of CMO or vendor employees.
If your school or charter school management organization has any questions or concerns regarding the implications of the final rule, please contact Matthew Plain or Tim Groves, or your Barton Gilman attorney at 401-273-7171.
