Franchisors ‘can be very comfortable’ in wake of NLRB reversal Zolnierek/iStock/Thinkstock

NLRB to rule on joint employer status by summer

Chairman Ring says uncertainty is hampering job creation

The National Labor Relations Board said it would make a rule defining exactly what a joint employer is by the end of summer, the body’s chairman said in a letter to three U.S. senators this week.

“Internal preparations are underway, and we are working toward issuance of a Notice of Proposed Rulemaking (NPRM) as soon as possible, but certainly by this summer,” NLRB chairman John Ring said in a letter dated June 5 to senators Kirsten Gillibrand (D-N.Y.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).

The letter was in response to concerns raised by those senators that the NLRB was avoiding ethics standards by considering such a ruling.

In February, the NLRB vacated a decision made in December that overturned the 2015 Browning-Ferris Industries of California Inc., because it determined that one of the board members, William Emanuel, should have recused himself from the process due to conflict of interest.

Browning-Ferris threatened longstanding relationships between franchisors and franchisees by potentially defining franchisors as joint employers of workers hired by franchisees, which could make franchisors liable for labor infractions by franchisees. 

As it currently stands, franchisors that have direct or indirect control over franchisees’ employees could be determined to be joint employers. That determination is made by the NLRB on a case-by-case basis. 

In a May 9 statement, Ring, who was named NLRB chairman on April 16, said businesses required more clarity on the matter.

“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today,” Ring said. “The current uncertainty over the standard to be applied in determining joint-employer status under the [National Labor Relations] Act undermines employers’ willingness to create jobs and expand business opportunities.” 

Ring said in his letter to the senators that he would also be introducing standards for determining when NLRB members should recuse themselves. 

“I view it as my responsibility to ensure the Agency upholds the highest ethical standards in everything we do,” he said. “To that end, we will be announcing in the near future a comprehensive internal ethics and recusal review to ensure that the Agency has appropriate policies and procedures in place to ensure full compliance with all ethical obligations and recusal requirements.” 

The Senate actually has a bill before it that would settle the issue by defining a joint employer as a company that has “actual, direct, and immediate” control over employees. 

That bill, the Save Local Business Act, was passed by the House of Representatives on Nov. 7, 2017, as H.R. 3441 by 242 votes to 181.

On May 26, Congressman Bradley Byrne, chairman of the House Workforce Protections Subcommittee, called on the Senate to pass the bill.

“Given the recent developments at the National Labor Relations Board (NLRB) and the failure to include joint employer provisions in the omnibus funding bill, it is more important than ever that the Senate act to give much-needed certainty to small business owners and employees across the country,” he said. “Without Congressional action, studies show that economic growth will be held hostage and jobs in communities from Oregon to Alabama are at risk. This is an issue where bipartisan support exists, and it is critical the Senate join the House in passing the Save Local Business Act.”

Contact Bret Thorn at [email protected]

Follow him on Twitter: @foodwriterdiary

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