New Joint Employer Bill Unveiled in House

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By Hassan A. Kanu and Tyrone Richardson

Two federal labor laws regarding employer liability and joint employment would be softened under a bill introduced July 27 by House Republicans.

The Save Local Business Act (H.R. 3441) is an expanded version of previous efforts to reverse the National Labor Relations Board’s broad definition of joint employment. The bill, introduced by Rep. Bradley Byrne (R-Ala.), would limit the extent to which affiliated businesses are considered joint employers for wage-and-hour and collective bargaining liability purposes.

The measure would amend the National Labor Relations Act and the Fair Labor Standards Act, which requires employers to pay minimum wages and overtime. It’s the latest effort by Republicans to undo the National Labor Relations Board’s 2015 decision in Browning-Ferris Industries of California Inc., in which the board held that organizations with indirect control over contractors, franchisees, or staffing agency workers may be considered their joint employers under federal labor law. An appeal of the decision is ongoing in a federal appeals court in Washington, D.C.

“We’ve got a great team of members of the House of Representatives who joined with us on this,” Byrne, chairman of the House Education and the Workforce Subcommittee on Workforce Protections, said at a news conference announcing the measure. “This is a bipartisan bill and we are dead serious about not just passing it through the House but getting it over to the Senate and getting 60 votes to pass it on the floor of the Senate and send it to the president, who we know will sign it.”

“This is a new piece of legislation that is reflective of how the joint employer issue has expanded and bled over into other statutes; it’s not the same bill from the last Congress,” Shannon Meade, director of labor and workforce policy at the National Restaurant Association, told Bloomberg BNA. The bill seeks “to restore the traditional direct, immediate control standard” that existed before Browning-Ferris, she said.

Many Democrats argue that the Browning-Ferris standard is a reflection of the evolving nature of work, given the proliferation of temporary jobs and gig work. Conservatives say it unfairly extends liabilities to businesses that don’t truly have control over a workplace.

Democrats Voice Opposition

The new legislation drew criticism from Rep. Mark Takano (Calif.). The ranking Democrat of the Workforce Protections Subcommittee told Bloomberg BNA the bill “weakens” worker rights.

“This legislation was not written in the best interest of American workers,” he said. “It was written in the best interest of companies that want to evade legal liability for workers’ rights, while collecting the profits that those workers produce.”

The bill also drew criticism from Rep. Bobby Scott (D-Va.), ranking member of the Workforce committee.

“H.R. 3441 immunizes joint employers from liability, even if they share contractual control of wages, benefits, scheduling or discipline,” Scott said in a statement. “Workers who seek to hold their employers accountable for violating wage and hour laws or refusing to collectively bargain will lose under this bill.”

Despite Republican White House, Uphill Battle

Co-sponsors on the measure include House Education and the Workforce Committee Chairwoman Virginia Foxx (R-N.C.) and Reps. Tim Walberg (R-Mich.), Henry Cuellar (D-Texas), and Lou Correa (D-Calif.).

Cuellar was among the three Democrats who joined 114 Republicans to co-sponsor a previous bill to rescind the Browning-Ferris standard. That legislation, the Protecting Local Business Opportunity Act (S. 2686, H.R. 3459), stalled in both chambers.

Republicans now control Congress and the executive branch, where officials seem to largely support the policy.

Rep. Tim Walberg (R-Mich.) mentioned at the event that he recently had breakfast with Alexander Acosta and that the labor secretary is “definitely on our side.”

Republicans nonetheless face an uphill climb in passing the measure, which many Senate Democrats, unions leaders, and progressives oppose. The new legislation will likely pass the House with little to no Democratic support but needs votes from at least eight Democrats to avoid a filibuster in the Senate.

When asked to identify any Senate Democrats who might support the bill, Foxx and Democratic co-sponsor Cuellar didn’t do so. But Foxx cited the 13 House Democrats who sent a letter to the NLRB in May asking for clarification on the joint employer question, and she said supporters of the policy should call their senators and urge them to sign on.

The committee held a hearing on the issue July 12, and the bill’s sponsorship by senior members of the panel means it will almost definitely proceed to a markup after the August recess.

The measure could also see swift House floor consideration if approved by the workforce committee, hinted at by a July 27 statement of support from House Majority Leader Kevin McCarthy (R-Calif.).

“In America, we don’t punish a person for someone else’s actions,” McCarthy said in the statement. The legislation “will treat American businesses fairly again so they can go back to what they do best—hiring workers and providing quality products and services for their customers.”

OSHA Amendment, Rider Strategy Abandoned?

Byrne told Bloomberg BNA that the committee and business groups who drafted the bill, including the International Franchise Association, the National Restaurant Association, and the Chamber of Commerce, discussed extending the bill’s definition of joint employment to the Occupational Safety and Health Act as well. But they decided against that, he said.

Byrne said he’d “like to have one common definition” across statutes and the different labor agencies. “But sometimes when you shoot your gun too broadly, you end up hitting yourself, and I think it’s smart that we focus in on where the problem was,” he said.

Most of the litigation and disputes in this area of law tend to arise in relation to pay disputes—such as failure to pay overtime or minimum wage—which are generally covered by the FLSA.

Republican lawmakers have also sought appropriations riders to roll back Browning-Ferris, although Rep. Andy Harris (R-Md.) signaled at the event that the strategy might not continue much further.

“What businesses need is certainty, not certainty from one year’s appropriations bill to the next,” he said. “They need the certainty of a permanent change in the law.”

The lawmakers were joined by some local business owners, including Ed Braddy, a Burger King franchisee in Baltimore, and Kristie Arslan, owner of a Popped! Republic popcorn store in Alexandria, Va.

To contact the reporters on this story: Hassan A. Kanu in Washington at hkanu@bna.com; Tyrone Richardson in Washington at trichardson@bna.com.

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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