EEOC Joins the Joint Employer Fray

The Equal Employment Opportunity Commission (EEOC) is set to issue a rule next month defining a “joint employer” relationship, according to the federal government’s fall regulatory agenda released today.


The joint employer issue rose to prominence when McDonald’s Corp. was sued by franchisee employees

The Department of Labor (DOL) and National Labor Relations Board (NLRB) are already working on their own joint employer definitions. The EEOC says its upcoming rule “would, among other things, update and consolidate the EEOC’s position on the topic to regulatory locations that are easier for stakeholders to find….”

In other words, the agency wants a consolidated definition that can be easily located and understood.

The issue of what defines a joint employer relationship came into focus under the Obama administration when the NLRB cast off the longstanding “direct control” interpretation in favor of an “indirect control” definition.

Say you have Company A that franchises to Company B, and A has joint control over hiring/firing and other administrative decisions of Company B. That would be “direct control.”

The “indirect control” orientation came into play when a group of fired McDonald’s workers at franchised locations sued the head corporation for redress, and the NLRB declared McDonald’s a joint employer using the indirect interpretation.

That case is still dragging on.

(Interestingly, a similar lawsuit against McDonald’s corporation in California was just this year rejected on the grounds that the head corporation is not a joint employer, and this decision came from the generally liberal-leaning 9th U.S. Circuit Court of Appeals.)

The NLRB joint employer rule is also set to debut in December, as is the rule from the DOL.

NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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