From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
Lawmakers expressed a deep partisan divide on the issue of joint employership at a House committee hearing July 12, despite calls to develop bipartisan legislation to define when multiple businesses can be considered a worker’s employer.
The hearing also involved some scathing exchanges between lawmakers and members of the panel testifying before the committee, which included business owners, union representatives, and a law professor.
“It sounded like some people are living in an alternative universe as I sat here and listened,” Education and the Workforce Committee Chairwoman Virginia Foxx (R-N.C.) said. “We really do have totally different points of view on many of these issues.”
Joint employership usually comes up in regard to wage, safety, and other types of employment liability. The issue is particularly relevant in today’s economy, given the continuing proliferation of gig and temporary work, contractors, and subcontractors. It’s also a central concern of franchisors and franchisees.
The National Labor Relations Board ruled in Browning-Ferris Industries of California Inc. that organizations with indirect control over contractors, franchisees, or staffing agency workers can be considered their joint employer. A federal appeals court in Washington, D.C., is currently hearing an appeal of the case.
Business and franchising group representatives at the hearing added to calls for House members to move forward with new legislation to reverse the NLRB’s ruling.
“Simply put, the question of when an employer should be held liable as a joint employer is an unsettled question of law, and Congress should settle it,” said Jerry Reese II, director of franchise development at the New Orleans-based Dat Dog LLC, who spoke on behalf of the Coalition to Save Local Businesses. “That is why our coalition is calling upon Congress to return to the very successful, traditional joint employer standard that helped businesses grow and succeed for decades.”
A witness representing FedEx put forth its proposal for a standard, statutory definition of “joint employer” and a safe harbor provision for employers that have legal compliance programs with their vendors or contractors.
Republicans generally disfavor the NLRB rule, arguing that it creates confusion for employers, unfairly extends liability, and harms small business owners. Democrats believe that a more narrow rule would weaken legal protections for employees and allow employers to avoid responsibility for workplace liabilities.
“Research shows that the consequences for workers in our economy’s increasingly outsourced growth sectors are lower wages, fewer benefits, and less workplace safety,” said ranking Democrat Bobby Scott (Va.). “Without joint employer standards, contingent workers may have no remedies for unfair labor practices, safety violations, or wage theft.”
The GOP favors a rule that would require a more direct relationship between employer and employee, and otherwise narrow the circumstances in which businesses are considered joint employers.
Another issue is whether any legislative proposals should affect only the National Labor Relations Act, or other employment statutes, such as the Fair Labor Standards Act.
Litigation over joint employership has “migrated to other federal laws like the FLSA,” so that statute “is definitely at play,” Shannon Meade, director of labor and Workforce Policy at the National Restaurant Association, told Bloomberg BNA after the hearing.
The NRA and U.S. Chamber of Commerce have said they are working with committee members on legislation. Some committee members have indicated plans to roll out a bill soon.
A spokeswoman for the committee reaffirmed that in a statement to Bloomberg BNA.
“It’s clear a legislative solution is needed, and that’s what the committee will be working towards in the weeks ahead,” she said.
Republicans’ proposals would lead to a rule that would “guarantee freedom for employers” that use contractors or temp workers to “insulate themselves” from liability issues while maintaining control of the workplace, Rep. Donald Norcross (D-N.J.) said.
Michael C. Harper, a Boston University School of Law professor, testified that the hearing was a “reaction to a lobbyist manufactured tempest in a teapot.”
But Foxx and other GOP members questioned whether the diverging points of view on issues such as joint-employer liability are due to some lacking experience in the private sector.
“I think a lot of it has to do with lack of experience in the private sector by some of our friends and some of our witnesses,” said Foxx, a former small business owner. “That there is absolutely no experience in the private sector and somehow or another opinions have been formed off of maybe one bad person.”
“I don’t know a bad employer,” Foxx said. “I’m sure they’re out there, but I sure don’t run into them. I hear horror stories all the time from the other side, but the employers I know care about their workers.”
Foxx ended the more than two-hour hearing with calls for House action. She criticized court decisions upholding and interpreting the NLRB’s rules, and cited the U.S. Constitution’s separation of powers.
“The founders did not intend for the courts to run this country. The founders intended the people’s body to run this country,” she said. “To suggest we need to leave all of this up to the courts is, I think, totally out of touch.”
To contact the reporter on this story: Hassan A. Kanu in Washington at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)