The National Labor Relations Board established the new joint-employer standard under a rule that takes effect for all employers — including both those with and without union employees — on Feb. 26, 2024. Not only does the new joint-employer rule significantly broaden the board’s definition of “employer,” it also increases potential liability and exposure for facilities when they engage staffing agency caregivers or other third-party workers.

Critically, under the new rule, the board can find that a facility is a joint employer with another entity under many circumstances. This may include circumstances where a facility reserves some authority to determine an essential term or condition of employment for the outside caregivers or workers, even if the facility never exercised such authority, or where a facility exerts so-called “indirect control” over the workers’ working conditions.

The board will apply the new joint-employer rule when investigating unfair labor practice charges and union election petitions, as well as when determining whether an entity has any potential collective bargaining obligations. The board’s actions also are watched carefully by other state and federal agencies that investigate and address employment-related issues, such as agencies responsible for handling employee wage payment and unemployment compensation claims and employer tax collection. The board’s new rule may result in other agencies expanding their similar rules for finding joint employer liability.

The development of this new joint-employer rule is just the most recent step in a long history of back-and-forth changes that seem to happen under each change in presidential administrations.  

Most recently, the board under the Trump administration issued a formal rule in 2020 that included a more employer-friendly joint-employer test. That 2020 rule reestablished a narrower threshold for determining joint-employer status under the NLRA, requiring parties trying to prove such liability to show that an employer exercised “substantial direct and immediate control” over workers’ terms and conditions of employment. 

However, soon after changes to the board’s make-up that occurred under the current Biden administration, the board began taking steps that resulted in the new rule that goes into effect on Feb. 26 — assuming there are no successful legal challenges that stop its implementation.

How it works

Once in effect, the board will find a joint-employer relationship if the “employers share or codetermine those matters governing employees’ essential terms and conditions of employment.” 

Sharing or codetermining working conditions will include both reserving the right or having authority to control or actually controlling any of the employees’ essential terms and conditions of employment. Essential terms and conditions of employment include: wages, benefits and other compensation; hours of work and scheduling; assignment of duties to be performed; supervision of the performance of duties; work rules and directions governing the manner, means and methods of the performance of duties and the grounds for discipline; tenure of employment, including hiring and discharge; and working conditions related to the safety and health of employees.  

As you can see, under these very broad categories, for highly regulated long-term care facilities that are explicitly required to maintain minimum staffing levels and ensure all onsite workers comply with health, safety and other care requirements, joint-employer status might be found with practically any third-party worker who provides onsite services. 

Under the prior joint-employer standard, while a finding of joint-employer status between a facility and its agency or vendor workers was possible, the board looked for evidence of significant, direct control over the terms and conditions of the worker’s employment. 

This was still a real risk for long-term care facilities, particularly for onsite, agency-employed caregivers, where a facility inevitably must exercise authority to supervise or direct such workers. Under the new rule, a finding of joint-employer status may be as simple as proving that a facility has health and safety rules that apply to all onsite workers. 

Facilities of all sizes which are already the target of union organizing efforts may find themselves subject to brand new collective bargaining obligations and may have greater exposure for unfair labor practice violations. 

Now is the time for facilities to consider their third-party worker relationships and contracts with staffing agencies and other entities to look at potential joint-employer liability issues. Review your contracts and agreements with all entities that supply workers who work in your facilities.  Carefully consider whether services are necessary for current business operations, whether the services can be consolidated with fewer providers, whether work needs to be performed onsite or at the facility’s specific control or direction, etc. 

If control over the workers is unnecessary, consider eliminating open-ended contract language that reserves all rights to direct and control the workers to the facility. If the workers are necessary, make sure facility staff know whether direct or indirect control and direction of the workers’ tasks is required under the specific circumstances and train managers and supervisors accordingly. 

The risk of a joint-employer finding will be necessary under many circumstances involving onsite agency caregivers, but for other workers, it may not be and facilities should be considering the issue for all work performed onsite. Taking the time to do so now may help avoid major potential risk of a finding of joint employer status down the line.  

Neville M. Bilimoria is a partner in the Chicago office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP, as well as the Cannabis Law Practice at Duane Morris LLP; nmbilimoria@duanemorris.com.

Jennifer Long is a Special Counsel in the Chicago Office of the Employment, Labor, Benefits and Immigration Practice Group at Duane Morris LLP, JLong@duanemorris.com.  Neville M. Bilimoria is a partner in the Chicago Office of the Health Law Practice Group and member of the Post-Acute Care And Senior Services Subgroup at Duane Morris LLP.

The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors.

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The National Labor Relations Board told Atlas Healthcare at Maywood in Maywood, NJ, to hire back Latoya Carter or, if her position no longer exists, bring her back into a “substantially equivalent position, without prejudice to her seniority or any other rights or privileges previously enjoyed.” The ruling, which was issued in September but only posted to the NLRB’s site Friday, also orders the facility to compensate Carter for “any loss of earnings and other benefits” because of her dismissal and to cover any tax liabilities she might incur from the lump sum of backpay. 

“[Atlas Healthcare] shall also compensate Carter for any other direct or foreseeable pecuniary harms incurred as a result of her unlawful discharge, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings,” the decision stated. 

Atlas Healtcare’s attorney told McKnight’s Long-Term Care News on Monday that the board’s decision exceeds its authority, pointing out that the agency is limited to remedial actions. 

“The NLRB’s  authority to devise remedies that effectuate policies of National Labor Relations Act is limited to remedial actions and does not extend to punitive measures,” lawyer Eric R. Stern said in an emailed statement. “At best, the NLRB acted to punish Atlas for a procedural ‘gotcha’ despite knowing that Atlas is ready, willing and able to present a meritorious defense that its employment decision concerning Ms. Carter was not only lawful, but appropriate.”  

Stern said Atlas plans to appeal the decision. NLRB rulings may be appealed to the US Court of Appeals for the appropriate jurisdiction. 

Unlike court decisions that provide details on a case’s background, the NLRB ruling contains scant information as to what led to the complaint filed by 1199SEIU, United Healthcare Workers East on Carter’s behalf. Her role at Atlas Healthcare is not mentioned in any documents linked on the NLRB’s docket, nor are there publicly available copies of the Facebook posts that led to Carter’s dismissal. 

According to the decision, Carter and other employees confronted facility Administrator Eli Finklestein in the lunchroom to complain about wages, hours and working conditions, specifically “about the shortage of clean linens and towels.” The decision noted that around Nov. 8, 2021, Carter made similar complaints on Facebook and that around Nov. 19, 2021, Finklestein terminated her employment via telephone.

The document stated that Finklestein carried out that action “to discourage employees from engaging in these or other concerted activities.”

The National Labor Relations Board gave skilled care operators another kick to the gut Friday.

It decided that under the right conditions, union elections might no longer be mandatory. Instead, the old card-check method will often suffice.

In a major boost for unions, the Democrat-leaning board voted 3-1 to let unions represent workers without elections when a majority sign authorization cards — and the employer is found to have committed a  labor law violation.

As anyone on either side of a union drive can tell you, things can get fairly contentious when issues such as salaries, benefits and working conditions hang in the balance. Which brings us to an interesting dispute-resolution question: Who gets to decide if an employer has stepped over the line during a union drive?

Predictably, it’s the same NLRB that holds this authority. Now to say that the NLRB has been pro-labor in its rulings lately would be more than mere understatement. Completely pro-labor is more like it.

So Friday’s announcement, despite being absolutely one-sided and more than a little unfair, was not much of a surprise.

Nor was it really a shock one day earlier, when the board announced a final rule that revives pro-union regulations dating back to the Obama era.

In an accompanying press release, the NLRB made little effort to hide its loyalties.

“Today’s decision, along with the board’s recently issued Final Rule on Representation, will strengthen the board’s ability to provide workers across the country with a timely and fair process for seeking union representation,” said Chairman Lauren McFerran.

Not that everyone is embracing the prospect of card checks becoming the new norm.

Critics, such as the National Right to Work Foundation, rightly argue that card checks are susceptible to manipulation and other underhanded tactics. Moreover, they lack the protections offered by secret ballots, according to Mark Mix, president of the organization.

“The core principle of American labor law is that the workers choose the union,” Mix said in a statement. “The Biden Administration has turned this commonsense principle on its head.”

It’s important to note that we saw a lot of pro-business decisions coming from the board when Republicans ruled the roost. Or at least, the White House.

And therein lies a big part of the management-labor problem in America today. The board members who are supposed to be the referees almost always have a rooting interest in the outcome.

In what courtroom would we expect judges to ignore even the pretense of impartiality? At the NLRB, it’s standard practice.

And the results speak for themselves.

 John O’Connor is editorial director for McKnight’s.

Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.

The July 3 decision, however, left several claims in play and ultimately called for the Luxor Healthcare-owned facilities to reinstate and repay five terminated employees represented by SEIU Healthcare MO-KS.

The union had alleged Luxor made unilateral changes to working conditions and pay after it took over Hillside Rehabilitation and Healthcare, Beauvais Rehabilitation and Healthcare and Rancho Rehabilitation and Healthcare in October 2021. All three facilities are in or near St. Louis.

Luxor’s immediate changes undermined existing collective bargaining agreements that had been in place under the previous owner and were slated to run through January 2023, the union alleged. The judge found that Luxor had to “maintain the predecessor’s status quo of conditions of employment” until “good-faith” bargaining led to a new agreement or reached an impasse.

“A perfectly clear successor has an obligation to bargain with the union prior to setting initial terms and conditions of employment that differ from those under the predecessor’s agreement with the Union,” wrote Administrative Law Judge Christal J. Key. “While Respondents were not required to adopt a predecessors’ contracts, they were obligated to maintain the status quo with regard to wages and terms and conditions of employment.”

The case was heard Jan. 30 through Feb. 2, 2023, but while awaiting a decision, the union reached a new contract agreement with Luxor and the three involved facilities. In May, the SEIU filed a motion seeking the partial withdrawal of unfair labor practice charges.

The judge only partially agreed, believing that maintaining some of the charges was necessary to support other allegations about alleged discharges and layoffs. The union had agreed to make the request as part of its bargaining process. But according to court documents, Luxor agreed that if the court didn’t allow a withdrawal, it would still consider the new agreements valid.

Key allowed the union to withdraw some broad charges related to an initial job offer letter sent to all employees after Luxor’s takeover, which included a problematic confidentiality clause.

“Instructing employees [that] they were precluded from forwarding the email and that the information was confidential is especially troubling here where employees were represented by the Union and the letters prohibited employees from sharing the information with the Union,” Key wrote.

A call Thursday to Luxor Healthcare’s main office in New Jersey was not returned by deadline.

Union request saves provider from violations

If Key had not agreed to the withdrawal, she wrote that she would have found the nursing home owners in violation of labor board rules regarding the privacy clause, changes to overtime and pay policies and the revocation of holiday pay for Martin Luther King Day in 2022.

Wages and overtime, she noted specifically, are mandatory items for union negotiation.

Layoffs are also required to be negotiated, a reason that Key called for former housekeeper Doris Thompson to be reinstated. The judge also ordered Luxor to review its records for other employees who may have been laid off in the housekeeping and laundry departments, something Key said the company did not do when subpoenaed earlier in the case.

In addition, Key found that a new, just-cause disciplinary standard led to the termination of four other employees, two of whom she also were targeted because of protected union activities. That standard was not valid, Key wrote, because all of the affected employees had worked at their facilities for more than 90 days and would have been due progressive discipline before firing under their existing union contract.

Key ordered Luxor to pay the terminated and laid off employees back pay with interest, as well as offer them their positions back.

She also allowed for the withdrawal of an allegation related to decreased wages after finding that very few employees would have been affected; Luxor had previously remedied some discrepancies. The union had also won higher wages for all employees under the new agreements.

“I find the collective bargaining agreements secured by the Union to be a reasonable resolution of the withdrawn allegations,” she wrote, noting that charges the union wanted to walk back did not “trade away” remedies for those who’d lost their jobs. “There is no history of previous violations or breach of previous settlements. This portends a better relationship between the parties and supports approval of the partial withdrawal request.”

A federal agency can proceed litigating allegations of unfair labor practices against the operator of several Connecticut nursing homes that declared bankruptcy in 2013.

The ruling from the 3^rd Circuit Court of Appeals allows the National Labor Relations Board to move against 710 Long Ridge Road Operating Company II LLC, which has been in and out of bankruptcy and other courts for more than a decade. Court documents emphasize the “complex” nature of the case, but the ruling from a three-judge panel on the Circuit Court found the question “before [them] simple” before noting that the preliminary injunction filed against the NLRB was incorrect. That leaves the agency free to pursue its case against the owner, despite the bankruptcy proceedings. 

In June 2012, HealthBridge Management LLC, which managed several nursing homes owned by 710 Long Ridge Road,  announced that it had reached an impasse with unions representing workers at five nursing homes that operated under separate but similar collective bargaining agreements, according to court documents and local reporting. The unions represented approximately 700 employees at Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. The agreements were in effect from Dec. 31, 2004, to March 16, 2011. 

The management company then made its “Last, Best, and Final” offer on June 17, 2012, which was rejected by the union as being “unfair to the employees,” according to the Westchester & Fairfield County Business Journals. Employees went on strike on July 3, 2012, after which the company hired replacement workers, court documents noted. 

In February 2013, the US Supreme Court ruled against the company that wanted to delay a lower court ruling ordering it to reinstate the striking workers. The case took another twist about a year later when HealthBridge announced that the US Bankruptcy Court for the District of New Jersey in Newark confirmed “with limited modifications” the bankruptcy reorganization plan. The company’s press release noted that the Bankruptcy Court “overruled the objection of The New England Health Care Employees Union, District 1199 (SEIU, District 1199) and the National Labor Relations Board.”

The 3^rd Circuit’s ruling on Thursday noted that the NLRB filed a “timely appeal” of the Bankruptcy Court’s decision, and the agency moved ahead with its administrative proceedings while the bankruptcy also chugged along. The appeal was filed with the US District Court for the District of New Jersey and argued that the Bankruptcy Court lacked the jurisdiction to call for the preliminary injunction halting the agency’s own work “because ordinary bankruptcy jurisdiction does not “allow [ ] interference with ongoing unfair labor practice cases,” according to court documents. The agency also argued that it is attempting to “fix” a claim, with which the Appeals  Court agreed. 

“Fixing a claim is exactly what the NLRB is attempting to do in the administrative proceeding,” the judges wrote, adding that the District Court “legally erred” in deciding against the agency. 

Neither attorneys for 710 Long Ridge Road Operating Company II LLC, nor the NLRB returned requests for comment by McKnight’s Long-Term Care News Friday. 

The revised standards, the board’s fourth recent attempt to settle joint employment law, could make it easier for workers connected with staffing firms, franchises or other alternative placement companies to both organize and sue as individuals, observers said Tuesday.

Instead of having to have direct control over workers, companies would be defined as joint employers if they work together or could work together to set wages and benefits. That makes many nursing home providers, still finding themselves reliant on temporary workers, vulnerable if the proposed rule is eventually finalized.

“Healthcare is going to be one of those industries that has more than its share of risk factors because the joint staffing model is a very familiar one,” said Steven Bernstein,  a Tampa-based regional managing partner with Fisher Phillips. “This rule is not coming down in a vacuum. It needs to be viewed against the backdrop of changing staffing models, many of which were accelerated by COVID-19.”

Standards for joint employment have shifted back and forth over the last decade, blown askew by shifting political winds. The Biden administration has proven itself labor-friendly, and this latest proposal is no exception.

The draft did not set a date for final adoption; comments will remain open for at least 60 days.

“The Board believes that establishing a definite, readily available standard will assist employers and labor organizations in complying with the [National Labor Relations] Act,” the board said in a draft posted for inspection Tuesday morning.

“The Board also seeks to establish a rule regarding joint employers’ bargaining obligations and potential unfair labor practice liability that correctly reflects both background legal principles and the National Labor Relations Act’s public policy of ‘encouraging the practice and procedure of collective bargaining’ and maximizing employees’ ‘full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection,’” the draft states.

Non-union facilities at risk

Beyond potentially strengthening bargaining rights, joint employment status is important because corporations that co-employ can both be sued over working conditions, pay and overtime, and protections such as child labor laws. Bernstein sees the latest, more expansive interpretation as potentially dangerous to nursing homes without unions; its wider scope could allow individual workers to seek investigation and prosecution of labor violations, he told McKnight’s Long-Term Care News Tuesday.

The National Employment Law Project explains that a broader joint-employment standard “shifts the balance of power toward agencies with a strong track record of compliance with labor and employment laws. Corporations that use staffing agencies will be more likely to set up procedures that detect their staffing agencies’ illegal labor practices.

“Conversely, when a corporation is not its temp workers’ employer, it can treat these workers as nothing more than a line-item expense in its budget, pit staffing agencies against each other to drive down labor costs, and ignore the illegal labor practices and exploitation that may result,” the pro-labor group writes on its website.

That potential downside of tighter labor regulations will likely combine with ongoing agency costs to further push providers to winnow their use of temporary nurse staffing, said labor and employment attorney Adam Santucci of Pennsylvania-based McNees, Wallace and Nurick. He suggested providers start to reconsider their dependency now.

“If you can’t get an agreement with good terms for a staffing agency that protects against this joint employer consideration, then you’re not going to use them because the risks are going to be such that it’s not worth it,” Santucci told McKnight’s. “Take a real hard look and make an assessment about where you need to change those relationships now to address that potential risk.”

Decades of back and forth

An Aug. 1 court decision precipitated the latest approach from the NLRB, one that Fisher Phillips experts predicted would “be unforgiving to those employers participating in alternative staffing arrangements.” Bernstein was reluctant to say whether the version revealed Tuesday was worse than expected, noting that the devil will be in the final details and in how the rule is enforced after adoptions.

In its draft, the board said that it would use public comments to broaden “a set of essential terms and conditions of employment to ensure that the joint-employer standard can encompass changing circumstances in the workplace over time, as well as the particularities of certain industries or occupations.”

Its proposal rule would rescind an existing 2020 rule largely seen as pro-business, and replace it with the new, broader interpretation that builds on common law dating to the 1930s.

The board also asked for comment from employees, unions and employers experienced with joint employment by Nov. 7, 2022. Comments replying to comments submitted during the initial comment period must be received by Nov. 21.

Bernstein urged providers that use outside labor to begin reviewing their contracts sooner rather than later and to consider removing extraneous language that shows potential to control a joint employee, particularly if the company never exercises that right.

The labor board made its ruling Friday, with the majority of members holding that lobbying efforts — though sometimes related to the terms of employment or collective bargaining — are not part of a union’s representation function. Therefore, opposing nonmembers should not be forced to pay those fees, according to an NLRB announcement.

“A union violates its duty of fair representation if it charges agency fees that include expenses other than those necessary to perform its statutory representative functions,” the board wrote.

In their 3-1 decision, NLRB members also ruled that it is not enough for a union to provide objecting nonmembers with assurances that their list of expenses had been appropriately audited. Rather, a union must provide independent verification that an audit had been formed. “Failure to do so violates the union’s duty of fair representation,” the board wrote.   

The case, United Nurses & Allied Professionals (Kent Hospital), resolves the National Labor Relation Board’s long-awaited decision related to the expenditure of agency fees for activities other than collective bargaining, administering contracts or adjusting grievances. Sherman & Howard LLC also has a summary and analysis of the ruling here.

The suit, filed against Essentia Health on Oct. 20 by United Steelworkers Locals 9460 and 9349, argues that the provider told the union last month a flu shot would be mandatory for all employees.

Essentia later told workers a vaccination would be a “condition of employment” except in cases of religious or medical exemptions. Employees would be required to get a shot by Nov. 10; those who refused or failed to get vaccinated would be fired Nov. 20, the Star Tribune reported.

In the suit a registered nurse for the organization explained that she has “never tolerated vaccines well” and was skeptical of the shots’ effectiveness.

“[If] I am required to get a flu shot in order to keep my job, and I suffer adverse consequences from the vaccine, no arbitrator’s award will be able to undo the damage,” wrote Christina Bergman, RN.

The union, which represents around 2,000 Essentia workers, requested that deadline be moved back, and that the vaccines be made voluntary. When neither happened, the workers’ group field a complaint with the National Labor Relations Board. The union’s lawsuit asks a court to prevent Essentia from terminating employees who don’t comply with the policy until the NLRB grievance is resolved.

Essentia, which employs more than 12,000 people in Minnesota, Wisconsin, North Dakota and Idaho, defended the vaccination policy in a statement to local media. Rajesh Prabhu, M.D., Essentia’s patient quality and safety officer, said the organization currently has an employee vaccination rate of 82%, but sought to improve rates with a mandatory program.

“We didn’t feel they would increase any further without some sort of mandatory policy,” Prabhu said.

The suit is still waiting to receive a hearing date. A representative for the Minnesota Nurses Association, which represents Essentia employees, told the Pioneer Press the group has a meeting scheduled for Nov. 7 to negotiate the policy.