This week, the National Labor Relations Board (NLRB) released its plan to expand the definition of “joint employer” which could have a harmful impact on both employers and employees.
The proposed rule would eliminate the current joint employment standard that was issued in 2020. This joint employer standard holds franchisees primarily responsible for addressing worker concerns — instead of their parent corporations, which are typically uninvolved in the day-to-day tasks of franchisee employees. This not only protects against unwarranted litigation, it also ensures employees have a clear pathway for holding their employer accountable.
It also means that companies with franchises can’t be forced to collectively bargain with employees they don’t interact with directly. These parent companies also won’t be liable for labor violations committed by their franchisees.
However, labor leaders and their Democratic allies want to make it easier for unions to organize as many workers as possible, even if it doesn’t make a whole lot of sense for employees. That’s where the NLRB’s latest plan comes into play.
This proposed rule would more broadly define a joint employer relationship to include “indirect and unexercised control over the terms and conditions of a job.” As one attorney summed up, “A company could be forced to collectively bargain or otherwise deal with a union that doesn’t represent the company’s own employees, lose the protections against union picketing of neutral employers, and share in liability for labor and employment violations committed by another business.”
How we define the joint employer standard has largely depended on the makeup of the NLRB, which currently has a Democratic-majority. But the Employee Rights Act (ERA) – a bill recently introduced in Congress by Senator Tim Scott (R-SC) – includes the Save Local Business Act, which clarifies the joint employer standard, allowing more franchisees to own their own businesses, giving more Americans the opportunity to realize their dream of starting their own business.
