Joint Employer

Employees at Williams Sonoma warehouses

The issue

The Biden administration’s appointees on the National Labor Relations Board have issued proposed regulations redefining what constitutes a “joint employer” under the National Labor Relations Act. Citing the “detrimental impacts the changes would have on the retail community,” NRF submitted a comment letter on December 7, 2022, formally opposing the proposed rules and urging the Board to retain the current, workable standard.

Why it matters to retailers

The joint employer issue is important to retailers because they regularly contract with third-party businesses to provide a variety of services in areas including information technology, distribution centers, shipping and facilities maintenance, among others. The changes to the standard proposed by the Biden administration are likely to create great uncertainty and will hinder job creation and free enterprise.

NRF advocates for appropriate joint employer rules

Professional woman pointing at computer for colleague

Under the new proposed rules, a company could be considered a joint employer even if it has only indirect control or unexercised potential control over another company’s employees. This new broader rule, if finalized, would overturn a standard that has been in place for decades, whereby a company can be considered a joint employer if and only if it actively exercises direct control over the employees in question.

In NRF’s view, the new proposed rules are overbroad, unnecessary and harmful. The changes the Biden nominees suggest will disrupt both existing and potential business relationships between retailers and their supply chain partners and contractors. NRF will continue to oppose the imposition of these rules on the retail industry in the regulatory agencies, in Congress and in the federal courts.