Joint Employer

Employees at Williams Sonoma warehouses

The issue

A definitive line regarding joint employment is needed to foster both existing and potential business relationships between retailers and their supply chain partners and contractors. In 2020, the National Labor Relations Board set a clear and easy-to-apply standard defining who is considered a joint employer under the National Labor Relations Act. Unfortunately, in 2022, Biden administration appointees to the National Labor Relations Board issued new regulations redefining what constitutes joint employment. Citing the “detrimental impacts the changes would have on the retail community,” NRF submitted a letter formally opposing the change that year, and in 2023 NRF joined a coalition of business organizations to file suit against the change. 
 
In January 2024, the House voiced its disapproval of the 2022 regulations and voted to reinstate the previous rules by passing a Congressional Review Act resolution. In March, the U.S. District Court judge hearing the lawsuit rejected the rules. Although President Biden vetoed the resolution in May, the NLRB dropped its appeal of the court’s decision in July. As a result of these efforts, the workable standard established in 2020 remains the law of the land. 

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.  

Under the Biden administration’s regulations, a company would have been considered a joint employer even if it had only indirect control or unexercised potential control over another company’s employees. This would have jettisoned the longstanding standard, that a company was considered a joint employer only if it actively exercised direct control over the employees in question. Doing so would have increased liability and ensured economic harm to businesses of all sizes. 

Professional woman pointing at computer for colleague

NRF advocates for appropriate joint employer rules

As the leading authority and voice for retail, NRF remains opposed to a broader definition of joint employment and will continue advocating for workplace rules that encourage business-to-business cooperation, job creation and free enterprise.