Under the Protecting Local Business Opportunity Act, introduced by Chairman of the House Committee on Education and the Workforce Rep. John Kline, R-Minn., an employer would be required to have “actual, direct and immediate” control over an employee to be considered a joint employer, which Kline and other legislators say is the same standard that was in place decades before the board’s “extreme” decision.
In late August, the NLRB concluded in a 3-2 ruling that Browning-Ferris Industries of California Inc. was a joint employer of workers provided by a staffing agency at a BFI recycling plant, reversing an August 2013 decision — challenged by Teamsters Local 350 — which said Leadpoint Business Services Inc. was the sole employer of workers at the BFI-owned recycling facility in Milpitas, California.
The board issued a statement at the time of the decision noting that 2.87 million of the nation's workers were employed through temporary agencies in August 2014 and that the previous standard hadn't kept up with changing times.
But Kline and co-sponsor of the bill Chairman of the Senate Committee on Health, Education, Labor, and Pensions Sen. Lamar Alexander, R-Tenn., slammed the decision, saying the new standard “would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses.”
“The board’s effort to redefine the idea of what it means to be an employer will wreak havoc on families and small businesses across the country,” the chairmen said. “Our commonsense proposal would restore policies in place long before the NLRB’s radical decision, the very same policies that served workers, employers, and consumers well for decades.”
Another co-sponsor of the bill, Chairman of the Senate HELP subcommittee on Employment and Workplace Safety Sen. Johnny Isakson, R-Ga., also slammed the decision by the board, saying it “bypassed Congress to overturn decades of established law.”
“Changing the joint-employer standard will impede franchising by taking away the benefits of a small entrepreneur being able to start a small business and grow it using a brand name that was established by a major corporation,” Isakson said. “If you take away incentives for corporations to franchise, the results will be similar to what we have already seen in so many oversteps by the Obama administration and the NLRB: making the big guys bigger and putting the small guys out of business.”
Isakson said the administration should be focusing on how to create more opportunities for small businesses to grow.
The lawmakers said the new standard means that multiple employers in many more cases will be forced to jointly negotiate working conditions with unions and share liability for labor law violations, which will result in larger businesses exerting greater control over the smaller employer who actually owns and operates the business.
As a result, they said, fewer employers will parcel out business to local subcontractors, suppliers or subsidiaries out of fear that they will now be liable for the subcontractor’s employment decisions. In addition, millions of workers will lose the ability to negotiate pay, hours and leave time with their direct supervisor because the larger employer and the union will now make those decisions, they added.
Rep. Phil Roe, R-Tenn., chairman of the House Subcommittee on Health, Employment, Labor and Pensions who is also a co-sponsor of the bill, said that with an economy still struggling to recover, the last thing needed is “more union favoritism” that makes it difficult for small businesses to survive and harder for Americans to find jobs.
“What we need instead are commonsense solutions that protect working families and job creators,” Roe said. “Unlike the NLRB’s misguided decision, this legislation will help, rather than hurt, the men and women working hard to provide for their families and those who aspire to one day have a business of their own.”
Senate Majority Leader Mitch McConnell, R-Ky., Kelly Ayotte, R-N.H., John Barrasso, R-Wyo., Roy Blunt, R-Mo., are also co-sponsors of the bill, along with many other Republican lawmakers.
--Additional reporting by Ben James. Editing by Emily Kokoll.
