U.S. Rep. Carlos Curbelo, R-Fla., the chairman of the U.S. House Agriculture, Energy and Trade Subcommittee under the Small Business Committee’s umbrella, ripped into the National Labor Relations Board (NLRB) decision focused on small businesses and contractors and employees.
On Thursday, the NLRB announced a 3-2 decision regarding Browning-Ferris Industries (BFI). According to a statement released by the NLRB on Thursday, the board “refined its standard for determining joint-employer status.” Under the decision, companies can be held accountable if contractors violate labor laws. Business leaders warn that the decision will gravely impact franchise operations and businesses that use employment staffing services.
“The revised standard is designed ‘to better effectuate the purposes of the act in the current economic landscape.’ With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances,” the NLRB explained on Thursday.
“In the decision, the board applies long-established principles to find that two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment,” the NLRB continued. “In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the board will – among other factors -- consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.
“In its decision, the board found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various work functions for BFI, including cleaning and sorting of recycled products,” the NLRB added. “In finding that BFI was a joint employer with Leadpoint, the board relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint as well as BFI’s reserved authority to control such terms and conditions.”
Curbelo insisted the decision will “significantly alter what it means to be an employer in America and will negatively impact both businesses and workers who are subcontracted employees” and will hurt the economy.
“Because of these new regulations handed down by a Democrat-controlled NLRB, companies will now be responsible for the treatment of employees hired by its contractors,” Curbelo said on Thursday. “Previously, companies were only responsible for employees under their direct supervision. This decision will inevitably result in the loss of jobs for lower income employees and make it more difficult for small businesses, especially restaurants, to find workers and operate proficiently. The NLRB has blatantly overextended their authority in their most recent ruling, and I will work in a bipartisan manner with my colleagues until we reach a better solution.”
In the meantime, big labor cheered the decision, insisting the NLRB was recognizing the changing workplace.
“This decision may very well signal the beginning of the end of outdated laws that fail to address an economic structure tilted against working people,” said Richard Trumka, the president of the AFL-CIO. “It means more working people can engage in meaningful collective bargaining by bringing all parties who control their wages and other conditions of employment to the table.
“Simply put, labor laws in America have failed to keep pace as the workplace has continued to evolve,” Trumka added. “This is one of many sensible, new avenues that can help bring workplace laws into the 21st century and reflect the true nature of today’s economy.”
The leadership of the business community pushed back against the decision, insisting it would lead to less contracts.
"This decision has broad implications as it appears to upend decades of settled law defining who the employer is under the National Labor Relations Act," said Randy Johnson, the senior vice president for labor, immigration and employee benefits at the U.S. Chamber of Commerce.
"Because of the array of obligations and liabilities that attach with a finding of joint employer status, the Browning-Ferris case could lead many employers to significantly alter or limit the contractual agreements into which they enter," Johnson added. "This will reduce employer flexibility and competition at a time when the economy continues to experience anemic economic growth."
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