Reintroduction of the PRO Act and the Joint Employer Definition Fight

By Kent Franchise Law Group

In February 2021, the Protecting the Right to Organize Act (“PRO Act”) was reintroduced in Congress by the Senate Committee on Health, Education, Labor and Pensions.

The PRO Act aims to amend the National Labor Relations Act, specifically regarding the joint employer issue, by adding that two or more people are considered the employers of a particular employee if each such person “codetermines or shares control over the employee’s essential terms and conditions of employment.” (See H.R.2474 – 116th Congress (2019-2020)). In order to determine whether such control exists, the PRO Act goes on to state that either the National Labor Relations Board (“NLRB”) or a court should consider direct control and indirect control, reserved authority to control, and actual control. Further, indirect control or reserved control alone can be sufficient in certain cases. The PRO Act’s language defining “joint employer” is an attempt to codify the NLRB decision in Browning-Ferris. (See Browning-Ferris Industries, 362 NLRB No. 186 (2015)).

In addition, the PRO Act attempts to codify California’s “ABC test” (to determine whether an individual is an employee or an independent contractor), which imposes stricter requirements for employers. Read our blog that explains the ABC Test.

The PRO Act also includes penalties for employees that violate federal law by retaliating against workers trying to unionize.

In the franchising community, the phrase “joint employer” and its changing definition has haunted franchisors for years. Various decisions have changed the definitions and tests for determining whether a franchisor is considered a joint employer of its franchisees. We will continue to watch the progress of the PRO Act and update this blog.

You can read a full summary of the PRO Act here.

Please check back on our blog for updates on the PRO Act as it continues to move through the system.