By Edward Nasser*<\/p>\n
On Tuesday, November 7th<\/sup>, the House of Representatives voted to pass a bill that would narrow the definition of a joint-employer and reduce liability for companies that work with subcontractors or staffing agencies. The bill, misleadingly titled the \u201cSave Local Businesses Act<\/a>,\u201d would effectively reverse the National Labor Relations Board\u2019s 2015 decision in Browning-Ferris Industries of California, Inc.<\/em><\/a> which allowed organizations with indirect control over employees to be considered their employer for violations of law and for the purpose of collective bargaining.<\/p>\n Prior to\u00a0Browning-Ferris<\/em>, a company needed to exercise \u201cdirect and immediate\u201d control over the terms and conditions of employment in order to be considered a joint-employer. Browning-Ferris<\/em> announced a new, expanded standard<\/a> for when two or more organizations would be considered joint-employers of a single workforce under the National Labor Relations Act. If (1) the entities are both employers as defined by common law; and (2) they codetermine matters governing \u201cthe essential terms and conditions of employment,\u201d they would be considered joint-employers. In evaluating whether an employer had sufficient control over employees to qualify as a joint employer, the Board considered\u2014among other factors\u2014whether an employer \u201caffects the means or manner of employees\u2019 work and terms of employment, either directly or through an intermediary.\u201d<\/p>\n The decision in Browning-Ferris<\/em> meant that a company that hired a contractor to staff its facilities may be considered a joint-employer of workers at that facility, even if the company did not actively supervise them. Companies could be held responsible for labor violations committed by contractors hired to staff its facilities and those workers would be legally entitled to collectively bargain with the \u201cupstream employer,\u201d<\/a> and not just the contractor. The Board argued that the new standard better protected workers in the modern economy, where \u201cthe diversity of workplace arrangements\u201d had \u201csignificantly expanded.\u201d The Save Local Businesses Act would effectively reverse Browning Harris <\/em>and codify the stricter \u201cdirect and immediate\u201d standard in both the National Labor Relations Act and Fair Labor Standards Act.<\/p>\n For the last few decades, companies throughout the economy have focused their businesses on core competencies, often outsourcing support activities like payroll, accounting, human resources, and janitorial services. This phenomenon is known as the \u201cfissured workplace<\/a>,\u201d and it has not only affected labor standards compliance, but lowered wages and limited employees\u2019 access to benefits by insulating companies from the misdeeds of their contractors. Worse yet, the fissured workplace dilutes workers\u2019 power by artificially segmented workers into tiny bargaining units. Browning-Ferris<\/em> attempted to combat this development by holding parent companies responsible for the violations of their contractors and allowing workers to organize and bargain with the parent company, the employer who truly controls their workplace.<\/p>\n Business groups like the International Franchise Association and the National Restaurant Association loudly criticized the Board for Browning-Ferris<\/em>, fearing that it would \u201csignificantly alter the face of American business\u201d and \u201cinflict serious damage to our nation\u2019s economy.\u201d<\/a> A majority in the House apparently agreed<\/a>; the Save Local Businesses Act passed with overwhelming Republican support and eight Democratic votes. In reality, the most the NLRA authorizes the NLRB to do is order an employer to bargain with workers, reinstate an employee fired in violation of the act, pay back wages to a wrongfully fired employee, or cease and desist from engaging in conduct that violates the act. The NLRA does not<\/a> even provide for monetary damages against an employer. Congress and the NLRB should be working to extend the basic, modest protections of the NLRA to more workers, not making backwards progress.<\/p>\n