Former President Barack Obama was accused by critics of unilaterally implementing an extensive labor policy agenda by going beyond what the law allowed. Now some say lawmakers should pass legislation ensuring that doesn’t happen again.
The Obama administration aggressively pursued its workforce agenda with the promise workers would benefit. The result was a pretty significant shift in federal labor policy. President Donald Trump has already done a lot to upend those policy reforms, but the partisan back-and-forth on federal labor policy is nothing new.
The Obama administration proposed legislation, issued executive actions, sent memos, and implemented regulations to achieve their goals. Critics denounced the changes as being harmful to employers and workers and an overreach of federal powers. It also strengthened the call for congressional action to better clarify federal labor laws like the National Labor Relations Act and the Fair Labor Standards Act.
The National Labor Relations Board (NLRB) was among the most active federal agencies on the labor policy front during the last administration. The board has a history of reflecting the political leanings of whoever the president is at the time and of altering policy by changing how it interprets federal law during labor dispute cases. Its ability to change policy became a critical tool during the Obama years.
“For the NLRB, this is kind of what happens,” Trey Kovacs, labor policy expert at the Competitive Enterprise Institute, told InsideSources. “It’s a highly political agency that makes decisions depending on who president is. I don’t know how much headway you can really make unless you have several consecutive Democratic presidents in a row, it’s going to get flipped back whenever there’s a change in the presidency.”
The NLRB was able to make several significant policy changes ranging from contracting to union elections. Republicans and the business community argued the board went way beyond the intent of the law — fueling a call for legislative action to clarify what the limits of the law actually are.
“I would also say they should probably think about addressing some of these policies with legislation,” Kovacs said. “If the next president is a Democrat, they’re going to do the exact same thing. They’re going to get their majority on the NLRB, takeover the Department of Labor, and reverse course again.”
Congress has already started taking action on some of these policy fronts – especially in regards to what is known as the joint-employer standard. The joint-employer standard determines whether an employer is legally responsible for the employees of a company it contracts with. Employers have typically had to have direct control over the employment policies of another company to meet the standard. The NLRB, during the last administration, expanded the interpretation to indirect control.
The legal interpretation of the standard was expanded during the last administration to the dismay of the business community. The Save Local Business Act was proposed to address the concern.
“The joint-employer issue is one that can only be fully solved with permanency by Congress,” International Franchise Association public affairs vice president Matt Haller told InsideSources. “The Senate should exercise its power to create certainty in legal precedent for franchises and all businesses, which are facing a great deal of uncertainty.”
The business community denounced the new standard as being overly vague and unnecessarily burdensome.
The new NLRB announced Dec. 14 that it has overruled a previous decision which set the precedent for the expanded joint-employer standard. But that decision could too be reversed back if a more progressive president takes office. The Save Local Business Act would ensure that couldn’t happen by making the limits of the law clear – while also addressing a patchwork of legal interpretations from different agencies and courts.
“This is a problem with the joint-employer issue at large,” Kovacs said. “There’s a number of federal statutes and different agencies that govern enforcement of those laws. So you have come at it from different angles. That’s what’s good about this legislation going through Congress because it would harmonize the National Labor Relations Act and the Fair Labor Standards Act, and set common standards for joint-employer.”
The Obama administration did a lot more than just change the joint-employer standard. Federal agencies tackled issues ranging from overtime, the franchise model, independent contractors, union elections, and workplace safety standards. The Trump administration has aggressively reined in many of those reforms, but without congressional actions that can just as easily be reversed back under a future president.
The Senate still needs to pass the joint-employer bill and it’s unclear which other labor policy issues lawmakers will tackle next. Trump also still has more work to do with his administration working through the regulatory process to undue more labor reforms from the last administration.
