A Republican led congressional committee accused federal regulators Tuesday of sacrificing small businesses to benefit big labor.
The National Labor Relations Board (NLRB) has worked to expand its own authority. It can now more easily make an employer responsible for the employees of another company. The House Education and the Workforce Committee believes the move was to unfairly benefit unions.
“(NLRB) handed a gift to Big Labor that will upend a business model that’s paved the way to the American Dream for countless individuals,” the committee stated. “The NLRB’s partisan decision in Browning-Ferris Industries overturned decades of labor policy, and it was issued despite concerns voiced by small business owners.”
The NLRB has had the legal authority make an employer liable for the employees of a separate company it contracts with under the joint-employer standard. The board first expanded its authority Jan. 12 while making a ruling in a labor dispute case involving Browning-Ferris Industries.
The NLRB previously looked at whether one company had direct control over the employees of another but since the Browning-Ferris case it has instead looked at indirect control.
Labor unions have a lot to gain from the ruling because it opens the doors to massive organizing campaigns. A union could target a single joint-employer as opposed to all the individual businesses that operate within it. Employers and business groups have warned against the new standard but their concerns have been mostly dismissed.
“Leave it to the agency’s partisan prosecutor to insult entrepreneurs instead of taking a hard look at the real world consequences of the NLRB’s Big Labor agendas,” the committee noted. “It’s what you’d expect from a government bureaucrat who isn’t concerned with running a business, hiring workers, or making payroll.”
Businesses tend to avoid being declared joint-employers because it is legally risky and potentially costly. Those opposed to the expanded standard have contested indirect control is legally ambiguous. The NLRB defended its new standard in 2014 during an ongoing case involving McDonald’s.
“Through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand,” The NLRB noted at the time. “To make it a putative joint employer with its franchisees, sharing liability for violations of our Act.”
Congressional Republicans have introduced numerous measures in the hopes of stopping the expanded rule. Business groups have also filed lawsuits to fight the rule in court. Thus far opponents have been unsuccessful in stopping it.
The White House and NLRB did not respond to a request for comment by InsideSources.
