The National Labor Relations Board (NLRB) recently issued a new joint-employer standard, which could have a significant impact on the trucking sector. This post will explain what this new standard means, how it could disrupt relationships among carriers, and what higher costs the trucking industry may face. The new standard stipulates that two companies share an employee if they hold one or more of an employee’s “essential terms and conditions of employment.” This means that factors such as wages, benefits, supervision, hours of work, among others, would be considered when assessing joint-employer relationships.
The NLRB’s new joint-employer rule is expected to have an impact on relations among carriers, particularly smaller trucking companies. Under the new rules, a company could be deemed a joint employer with a second company if they share any of the above-listed essential terms and conditions of employment – this finding could result in companies’ labor law violations being attributed to each other. This would be the case even if the majority of the employees’ essential employment terms and conditions were only being provided by one of the companies rather than by both companies.
The new standard is contentious because it could subject companies to greater legal liability, which may lead to higher costs for companies. It could also disrupt relationships between carriers, as smaller firms could be discouraged from entering into partnerships with larger carriers. This, in turn, could negatively impact smaller carriers’ income opportunities. Carriers may have to decide whether it is worth the risk of entering into a partnership with another carrier or to do business completely solo in order to avoid elevated legal exposure.
Furthermore, the American Trucking Associations expressed concern about the inclusion of workplace safety and health as one of the determining conditions for a joint-employer relationship. Many motor carriers have contractual provisions with one another that require complying with federal health and safety standards. Including health and safety issues in the new standard complicates an already complex issue of ensuring compliance with industry safety standards.
Another concern is that the new NLRB rule could impact not only employment relationships but also franchise contracts. Contractual agreements are designed to increase economic efficiency and may no longer be viable post-implementation, potentially increasing costs in an already high-cost sector. The new standard could impose additional requirements for the franchisor that aren’t directly related to the day-to-day operation of the business.
In conclusion, the joint-employer rule change by the NLRB could prompt significant disruptions in the trucking industry, increasing costs and complicating compliance with industry standards. It may also have a significant impact on business relationships between carriers, especially smaller carriers. Additionally, including health and safety as a determining factor in joint-employer relationships further adds to the complexities of evaluating these legal issues. Ultimately, the trucking industry will weather the storm, but it will be important to stay informed of how the new standard continues to develop over time.