Joint Employer Bill Pushes Back on Labor Initiatives

Republican Senator Lamar Alexander (R-Tenn.) and Congressman John Kline (R- MN) each on Sept. 9 introduced legislation designed to undo the recent expansion of joint employer liability under federal law. The legislation responds to a National Labor Relations Board (NLRB) decision issued last month redefining "joint employer" in a manner that would make it easier for two or more companies to be considered "joint employers."

The legislation, known as the Protecting Local Business Opportunity Act, would amend the National Labor Relations Act (NLRA) to revert to the joint employer test in place prior to last month's NLRB decision. Under the prior standard, a company could only be considered a "joint employer" if it possessed and exercised authority to dictate another employer's actions with respect to its employees. The NLRB's ruling last month held that simply having authority to dictate employee actions -- even if that authority is not exercised -- can lead to joint employer liability.

The Kline-Lamar measure would require two businesses to exercise “actual, direct and immediate” control over the “essential terms and conditions” of a worker's employment to be considered the worker's joint employers under the NLRA.

An expanded joint employer standard would expose more companies to legal liability for how their subcontractors, staffing agencies and franchisees treat their employees. The NLRB's recent ruling could also make businesses -- especially franchisers -- more susceptible to workforce unionization by imposing new collective bargaining obligations and allowing unions the ability to strike or picket a large entity compared with the individual locations where there is a dispute.

Adding to the drumbeat of expanded joint employer liability, last month a Department of Labor memorandum that was leaked to several media outlets indicated that enforcement officials are considering imposing joint employer liability on franchisers.

The memo instructs enforcement officials to determine whether the corporate office is involved in the purchase of equipment; recommends suppliers to use; and is involved in decisions regarding work hours, overtime, workers' compensation, store layout, hours, staffing, number of employees per shift, positions of employees, number and responsibilities of managers, and job descriptions. Ultimate decisions will be made on a case-by-case basis, the memo says.

Although the Kline-Alexander legislation is likely to see a markup in both the House and the Senate, it faces an uphill battle in the Senate and would face a certain veto by President Obama.



Tiffany Wlazlowski Neuman's photo

Tiffany Wlazlowski Neuman

Tiffany Wlazlowski Neuman develops and executes communications strategies to advance NATSO’s public relations and advocacy goals. Tiffany also develops and oversees partnerships related to the NATSO Foundation’s public outreach initiatives. Tiffany lives in the D.C. metro area with her husband and their two sons.More
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