NLRB overrules previous joint-employer ruling

NLRB reverses Obama-era ruling on employers' liability for subcontractors

Holiday gift giving has started early this year thanks to a busy week by the revamped, employer-friendly National Labor Relations Board (NLRB).

NLRB released a statement saying in all future cases, two or more parties will be considered "joint employers" if one party has direct control over the other party's employment terms, The Hill reports.

Thursday's decision to reverse the BFI standard was 3-2 and came in a separate case involving the firing of seven workers by Hy-Brand Industrial Contractors and Brandt Construction. Following the Board's ruling, the test for determining joint employer status will be returned to its pre-Browning-Ferris state, which required a stronger showing of employer control in order to find a joint employer relationship.

A US labor board on Thursday overturned an Obama-era ruling that had made it easier for unions and workers to hold companies accountable for practices of contractors and franchisees, a decision welcomed by business groups that could affect a major case against McDonald's Corp. In upholding Boeing's no-camera policy, the NLRB overturned its 2004 Lutheran Heritage standard for evaluating the legality of facially neutral employee workplace rules. The reinstatement of the historical joint employer definition ensures that employers are directly responsible for their employees, and that the franchise business model, which is responsible for creating millions of jobs and paving the way for tens of thousands of hoteliers to achieve the American dream will remain a reliable avenue to economic freedom.

"The 2015 Browning-Ferris ruling stacked the deck against small businesses and inserted uncertainty into day to day operations", Cicely Simpson, the group's executive vice president of public affairs, said in a statement. Rather, there will be a return to the original test which focuses on the degree of direct and immediate control by employers.

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A 2015 Obama-era joint-employment liability ruling has been overturned this week, changing the standard for holding a company or ownership responsible for labor law violations that occur as a result of its relationship with another company.

The board said the companies were joint employers of several workers who were unlawfully fired for going on strike.

Thursday's decision reversed that ruling.

The International Franchise Association and National Restaurant Association, which represents McDonald's Corp and other fast-food restaurant operators, have been especially vocal critics of the Browning-Ferris standard, arguing that it could doom the franchising industry. "Today's decision restores years of established law and brings back clarity for restaurants and small businesses across the country".


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