The House passed legislation Tuesday to rein in the National Labor Relations Board, the nation's top labor law enforcement agency.
The legislation, titled the Save Local Business Act, would prohibit the board from implementing its expanded "joint employer" rule, which vastly expanded the circumstances under which a business could be held liable for workplace violations by another business. Eight Democrats joined with Republicans to pass the legislation in a 242-181 vote.
Republicans argued the rule was a vast overreach by the agency and threatened to hurt the economy by forcing corporations to cut back on franchising their brands. Business groups argue the rule would make franchisers legally liable for franchises even when the latter are separate businesses that merely rent out the corporate brand.
"The premise of this legislation is simple. It’s about protecting the ability of entrepreneurs in this country to start and run their own business. And it’s about ensuring opportunity is within reach for all Americans," said Rep. Virginia Foxx, R-N.C., chairwoman of the Education and Workforce Committee. "The legislation simply restores a common-sense joint employer standard. And it does so in a way that upholds vital worker protections and ensures all employers know their responsibilities to their employees."
The previous standard the board used required one business to have "direct control" over the workplace policies of another employer. In a 2015 case called Browning Ferris, the NLRB expanded the rule to the much vaguer "indirect control." The board has since used the case to pursue a major labor rights violation cases against McDonald's Corp., arguing it is responsible for actions by its franchises.
Democrats opposed the legislation, arguing it would hurt workers' rights. "It will make it harder to hold employers accountable for abuses of their employees, especially with regards to equal pay claims," argued Rep. Rosa DeLauro, D-Conn.
Republicans countered that the workers were already protected under the earlier standard and the NLRB's expansion created confusion over who was liable. "As someone who practiced law in this field for years, I have no doubt today’s vote will make things easier for small businesses throughout the country and help clear the air of uncertainty," said Rep. Bradley Byrne, R-Ala., lead sponsor of the legislation.
The legislation has an uncertain future in the Senate. The House legislation had 123 co-sponsors, three of whom were Democrats, and only five more voted for passage. Trade groups had been hoping for broad bipartisan support to convince the Senate to take it up.