Senate Committee Examines Joint Employer Standard

The Senate Small Business Committee held a hearing on June 16 examining the National Labor Relations Board's (NLRB's) new joint employer standard, where lawmakers heard from witnesses that businesses are fearful and uncertain about their legal responsibilities.
 
The NLRB's 2015 decision in a case called Browning-Ferris Industries of California, Inc. expanded joint employer liability under federal labor law. The NLRB held that a business may be liable as a joint employer if it indirectly controls an employment relationship or has reserved the right to do so.  Earlier board precedents, dating back to 1984, required a showing that a business entity shared direct control of employees' terms and conditions of employment for the business to be considered a joint employer. 
 
The ruling has substantial implications for the franchise business model, which is ubiquitous throughout the truckstop and travel plaza industry.  
 
At the hearing, a representative of the Coalition to Save Local Businesses, of which NATSO is a member, testified that the new joint employer standard places franchisors in the unfortunate position of having to distance themselves from their franchisees.  Franchisors are "understandably reluctant to provide help or even advice on any matter that remotely relates to employment," the coalition said in its testimony.  The testimony can be read in full here.
 
The new joint employer standard also makes businesses more susceptible to workforce unionization by imposing new collective bargaining obligations and allowing unions the ability to strike or picket a large corporate entity rather than the individual location where there may be a dispute.  For example, Microsoft Corp. last week vocally opposed the new standard; despite being praised by President Obama in 2015 for requiring contractors in its supply chain to provide paid leave to its employees, Microsoft now fears that the NLRB may use that very policy as justification to compel the tech giant to bargain with a supplier's union under the new joint employer standard.
 
NATSO has created a detailed analysis and compliance guide outlining the NLRB's effort to revise the joint employer standard, and its implications for NATSO member companies.  To read this member-only "regulatory toolkit," click here. 
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David Fialkov

David Fialkov is the Vice President of Government Relations, as well as the Legislative and Regulatory Counsel, at NATSO. In this capacity, Mr. Fialkov direct's NATSO's legislative, regulatory, and legal strategy on a range of issues, including transportation, energy and fuels, labor, data security, and taxes. Mr. Fialkov also oversees NATSO's political engagement program, including individualized legal and political counsel to member companies. Prior to joining NATSO, Mr. Fialkov was the senior associate in the Government Affairs and Public Policy practice at the law firm of Steptoe and Johnson in Washington, D.C. At Steptoe, Mr. Fialkov advised clients on legislative, regulatory, and political issues, as well as legal concerns. His primary clients included trade associations representing the motor fuel wholesale and retail industries, including the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America. Mr. Fialkov's focus was not only on the motor fuels business, but also the litany of other issues that retailers confront, including labor matters, foodservice issues, healthcare and employment issues, tax matters and data security. Prior to joining Steptoe, Mr. Fialkov graduated with honors from George Washington University Law School. He received his B.S. Summa cum laude with highest honors from Clark University in Worcester, MA. He lives in Washington, D.C. with his wife Allison and daughter Lilah. More
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