Washington Labor Relations Change Impacts Trucking Sector
WASHINGTON — A recent alteration in the National Labor Relations Board’s (NLRB) criteria for identifying a company as a “joint employer” with another entity may disrupt relationships among carriers and lead to increased costs for the trucking industry.
New Joint Employer Standard
On Thursday, the NLRB introduced a new standard under which a company can be designated as a joint employer if it shares one or more of an employee’s “essential terms and conditions of employment.” These conditions now include:
- Wages, benefits, and other compensation.
- Hours of work and scheduling.
- Assignment of job duties.
- Supervision of job performance.
- Work regulations and disciplinary grounds.
- Employment tenure, including hiring and termination.
- Safety and health-related working conditions.
Concerns from the Trucking Industry
The American Trucking Associations (ATA) expressed significant concerns over the inclusion of workplace safety and health as criteria for establishing a joint employer relationship. This is particularly relevant as many motor carriers have contractual obligations with other carriers to adhere to federal health and safety regulations.
Contractual Implications
“This will require a comprehensive review of those contracts due to the risks associated with being labeled as the employer of another’s workforce, especially when control over those employees is limited,” ATA remarked.
ATA’s Reaction to the Final Rule
In response to the finalized regulation, ATA indicated that it mostly aligns with the initial proposal from the NLRB. They acknowledged that while the Board understands that merely requiring compliance with health and safety regulations does not constitute a joint employer relationship, concerns remain that the new rule will restrict flexibility for trucking companies and hinder their operations.
Legal Perspectives on Joint Employer Status
Donald Vogel, a partner at the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary, disagreed with some aspects of ATA’s evaluation. He highlighted that, according to the new rule, simply sharing or co-determining one employment condition can lead to a joint employer designation. Moreover, this classification can arise from both actual and potential authority over employment terms.
Future Implications
The NLRB’s revision concerning joint employer status could also make companies accountable for the unfair labor practices of others, as governed by the National Labor Relations Act. “Increasing the number of companies classified as joint employers could compel them to negotiate with unionized workforces and incur liabilities for unfair practices,” Vogel noted. Consequently, if a company is identified as a joint employer and required to negotiate over previously inapplicable terms, operational costs are likely to rise.
The new rule is set to take effect on December 26, 2023, applying solely to cases filed after this date. However, as it is deemed a major rule, it is subject to congressional review, which may result in either a delay or withdrawal of the regulation.
