The National Labor Relations Board's new general counsel sent a notice to the board's regional directors pulling back on the labor enforcement agency's controversial "joint employer" doctrine for when one business can be held responsible for workplace violations by another company.
Peter Robb cautioned the directors against issuing complaints based on the controversial standard adopted during the Obama administration and instead told them to seek advice from the Washington headquarters.
"Examples of board decisions that might support issuance of complaint but where we also might want to provide them with an alternative analysis include ... Finding joint employer status based on evidence of indirect or potential control over the working conditions of an employer's employees," Robb said in a memorandum dated Dec. 1 to all regional directors.
Joint employer refers to when one company is so tightly involved in the actions of another it can be said to have control over the other's workplace policies. The previous standard the board used required one business to have "direct control" over the policies of another. In a 2015 case called Browning Ferris that was expanded by the NLRB to the much vaguer "indirect control."
The move has been controversial, as it could vastly expand legal liability for companies that franchise their brands. Previously franchisers were understood not to be joint employers. The board has used the case to pursue a major labor rights violation charge against McDonald's Corp., arguing it is responsible for actions by its franchises.
Business groups and Republican lawmakers argue the change could hurt the economy by prompting companies to pull back on franchising rather than risk the expanded liability. Last month House Republicans pushed legislation to require the NLRB to revert to the "direct control" standard.
Robb's memo doesn't appear to formally rescind the board's policy. It would appear to leave the option open on a case-by-case basis but would prohibit the regional directors from acting without the headquarter's consent. The five-member NLRB currently has a 3-2 Republican majority, two of whom are President Trump's picks.