This National Labor Relations Board (NLRB) decision, 374 NLRB No. 101, concerns a petition filed by the Union of American Physicians and Dentists (the Petitioner) to represent a unit of hospitalists employed at two PeaceHealth hospitals in Washington. The Petitioner asserted that South Sound Inpatient Physicians, PLLC (Sound), the direct employer, and PeaceHealth were joint employers of these hospitalists.
Following a hearing, the Regional Director had found PeaceHealth to be a joint employer, concluding that PeaceHealth exercised substantial direct and immediate control over the hospitalists' hiring, supervision, wages, and benefits. This finding was based on PeaceHealth's participation in interviews for at least one provider, the requirement of PeaceHealth credentialing as a precondition of employment, PeaceHealth's directives on charting practices, training, committee participation, and management of patient caseloads per shift, as well as its influence on wage increases tied to contract negotiations and its remittance of quality payments. The Regional Director also determined that PeaceHealth exercised direct and immediate control over benefits by dictating the level of malpractice insurance provided by Sound.
On review, the NLRB reversed the Regional Director's determination. The Board applied the joint-employer standard as defined in Section 103.40 of the NLRB’s Rules and Regulations, which requires that a joint employer share or codetermine employees' essential terms and conditions of employment by possessing and exercising substantial direct and immediate control over those terms.
The Board found that PeaceHealth did not meet this standard for any of the essential terms and conditions. Regarding hiring, PeaceHealth's participation in interviews was deemed insufficient, and the credentialing requirement was found to extend no further than minimal hiring standards. For supervision, PeaceHealth's directives on charting, training, and patient load were determined to be limited to specifying what work to perform, where, and when, but not how to perform it, and were not substantial enough to meaningfully affect the employment relationship. Concerning wages, the Board found that the evidence only established that Sound made wage decisions in light of the financial terms of its contracts with PeaceHealth, which is a common feature of contracting relationships and does not equate to direct and immediate control. Regarding benefits, the Board found that PeaceHealth merely required Sound to ensure malpractice insurance coverage, but did not demonstrate control over selecting the plan, carrier, or level of coverage.
Therefore, the NLRB concluded that the Petitioner failed to meet its burden of proof to establish that PeaceHealth exercised substantial direct and immediate control over any essential terms and conditions of employment. Consequently, the Board reversed the Regional Director's joint-employer finding and remanded the case for further appropriate action.
Significant Cases Cited
- Standard for Determining Joint Employer Status, 88 Fed. Reg. 73946 (Oct. 27, 2023): This regulation outlines the criteria for determining joint-employer status under the National Labor Relations Act, requiring substantial direct and immediate control over essential terms and conditions of employment.
- Joint Employer Status Under the National Labor Relations Act, 85 Fed. Reg. 11184 (Feb. 26, 2020): This rule established the Board's regulatory framework for assessing joint-employer status, emphasizing the need for shared or codetermined control over essential employment terms.
- Withdrawal of the 2023 Standard for Determining Joint Employer Status, 91 Fed. Reg. 9707 (Feb. 27, 2026): This notice announced the withdrawal of a previously issued joint employer rule and the restoration of prior regulatory text.
- Browning-Ferris Industries of California, Inc. v. NLRB, 911 F.3d 1195 (D.C. Cir. 2018): This decision addressed the definition of joint employer and clarified that routine contractual terms do not inherently establish joint-employer status.
- Cognizant Technology Solutions U.S. Corp. and Google LLC, 372 NLRB No. 108 (2023): This case provided an example of direct and immediate control over benefits where one entity dictated specific levels of paid leave and employee assistance program sessions.
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