White House Working to Address Joint Employer Issue, Pence Says

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By Chris Opfer

The Trump administration is working to unwind the controversial expansion of joint employer liability for businesses in franchise and other affiliated relationships, Vice President Mike Pence told a retail industry lobbying group July 18.

Business advocates and mostly Republican lawmakers have been trying to undo the National Labor Relations Board’s 2015 Browning-Ferris decision, in which the board said a company may be considered a joint employer of another business’s workers even if it exerts only indirect control over them. Critics say the decision—and moves to broaden joint employer liability under other federal and state laws—could change the way companies in franchise, staffing, and other contractual relationships do business by forcing them to take a more active role in labor issues.

“As we speak, our administration is rolling back the joint employer rule,” Pence said during remarks at a National Retail Federation event.

Pence was referring to the Labor Department’s recent decision to withdraw an informal Obama-era guidance document, spokesman Marc Lotter told Bloomberg BNA July 18. The DOL in that document took an expansive view of joint employer liability under federal wage-and-hour law.

An appeals court in Washington is set to soon issue a decision in a lawsuit challenging the Browning-Ferris ruling.

Supporters of expanded joint employer liability say the NLRB’s decision gives workers a chance to negotiate with the companies that actually determine the terms and conditions of their employment. “As the Board’s view of what constitutes joint employment under the Act has narrowed, the diversity of workplace arrangements in today’s economy has significantly expanded,” the NLRB explained in the Browning-Ferris decision.

The NRF’s board of directors includes representatives from American Express, IBM, B.J.’s Wholesale Club, Brooks Brothers, and Deloitte LLP, among others.

VP Sends Signal

Pence’s comments came as Congress is considering addressing the joint employer issue via legislation.

“He’s sending a signal to Congress that the administration would support lawmakers addressing the joint employer uncertainty via a legislative vehicle,” Matthew Haller, the International Franchise Association’s senior vice president for communications and public affairs, told Bloomberg BNA July 18. The IFA has led the lobbying charge against the NLRB decision, saying that it would force franchisers to take significant control of franchisee’s operations.

Browning-Ferris is likely to ask the U.S. Supreme Court to weigh in on the issue if the appeals panel sides with the NLRB. The Trump administration has not said whether it would continue to defend the decision if it reaches the high court, but Pence’s comments suggest that’s unlikely.

Meanwhile, President Donald Trump recently appointed two lawyers—William Emanuel and Marvin Kaplan—for a pair of openings on the board. If confirmed, Emanuel and Kaplan would give the five-member NLRB its first Republican majority in nearly a decade.

The board is likely to eventually revisit the joint employer issue.

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

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

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