17 / 24
Quarter4
delawarerestaurant.org17
The Obama administration
is redefining what it means
to be an employer.
The National Labor Relations Board
(NLRB) on Thursday handed down one of
its biggest decisions of President Obama’s
tenure, ruling that companies can be
held responsible for labor violations
committed by their contractors.
While the ruling from the independent
agency specifically deals with the waste
management firm Browning-Ferris,
the so-called “joint employer” decision
could have broad repercussions for
the business world, particularly for
franchise companies.
Opponents of the action warn the
ruling could hurt businesses as diverse
as restaurants, retailers, manufacturers
and construction firms, as well as hotels,
cleaning services and staffing agencies.
“This decision has broad implications,
as it appears to upend decades of settled
law defining who the employer is under
the National Labor Relations Act,” said
Randy Johnson, a senior vice president at
the U.S. Chamber of Commerce.
Restaurants could see the biggest changes.
Fast food chains such as McDonald’s and
Burger King will likely assert more authority
over — or even cut ties altogether with — local
franchise owners, business advocates say.
An issue in the case was whether
Browning-Ferris was responsible for
the treatment of contracted employees.
The Houston-based company hired
Leadpoint Business Services to staff a
recycling facility in California.
The labor board determined Browning-
Ferris should be considered a “joint
employer” with the Phoenix-based
staffing agency. As a result, the company
can be pulled into collective bargaining
negotiations with those employees
and held liable for any labor violations
committed against them.
The NLRB ruling is a sharp departure
from previous decisions that stated
companies were only responsible for
employees who were under their direct
control. Without the power to set hours,
wages or job responsibilities, the earlier
rulings held, companies could not be
held responsible for the labor practices
of the contractors.
But the National Labor Relations Board
charted a new course Thursday, saying the
old standard is “increasingly out of step
with changing economic circumstances.”
legislat ion
NLRB Rules Against Business in
Pivotal Joint-Employer Decision
By Tim Devaney — The Hill