This article was originally published in Middle Market Growth, the official publication of ACG, Association for Corporate Growth.
Identical bills to limit the impact of a recent decision by the National Labor Relations Board were introduced on Wednesday by committee chairmen in the U.S. House and Senate.
The legislation, “The Protecting Local Business Opportunity Act,” would clarify the definition of a joint employer under the National Labor Relations Act of 1935. Last week a 3-2 decision by the NLRB expanded the definition of a joint employer to include companies that rely on franchise and contract workers. The decision centered on a case, Browning-Ferris, involving sanitation workers in California.
Prior to the ruling, companies had to have direct operational control to be impacted by labor disputes involving employees. The ruling has wide-ranging consequences beyond the fast food and construction industries, and is likely to impact any business that partners or subcontracts with outside vendors and suppliers.
The new bills, S. 2015 and H.R. 3459, were introduced by Sen. Lamar Alexander (R-Tennessee), chairman of the Senate Health, Education, Labor, and Pensions Committee; and Rep. John Kline (R-Minnesota), chairman of the House Education and Workforce Committee.
ACG contends that upending the current, well-established, joint employer standard would cause uncertainty and disruption for many small and midsize business owners, force some small businesses to close and deter aspiring entrepreneurs from opening businesses and creating new jobs.
For more information on the potential impact to your business this might have, contact one of our Employment & Labor attorneys.
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