National Labor Relations Board’s Threatened Expansion of Joint Employer Doctrine Would Increase Employment Law Risks for US Private Equity Firms

August 18, 2014

To bring their full financial and operational expertise to portfolio companies, private equity firms frequently adopt an active approach to overseeing their investments. However, the greater a firm’s involvement in the day-to-day operations of its portfolio companies, the greater the risk that the firm will be deemed an “employer” of the portfolio companies’ employees, and be potentially liable under a host of federal and state laws. This article discusses some of the potential employment law liabilities that private equity firms can face, and offers some tips for avoiding liability when walking the fine line between prudent oversight and excessive entanglement in the day-to-day operations of portfolio companies.

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