Republican lawmakers are considering a pro-business bill to nullify the Obama administration’s efforts to expand the legal definition of “joint employer,” which is when one business is legally responsible for workplace violations at another company’s worksite.
Lawmakers on the House Education and Workforce Committee and business lobbyists met privately Wednesday to strategize on what to do about the joint employer policy. Sources present at the meeting and who spoke on condition of anonymity said many believed that merely rewriting one law would not be sufficient bring back the previous legal standard, and that a broader effort encompassing all workplace-related laws was necessary.
As a result, lawmakers are considering a sweeping bill that would go beyond re-writing the National Labor Relations Act, their focus in the previous Congress.
The sources cautioned that the discussion was broad and no official consensus emerged, and that it was more of an effort to discuss options on what to do next. No legislation has yet been introduced in this Congress to address the joint employer policy. The meeting was first reported Thursday by Politico.
Joint employer refers to when two businesses are so intertwined that one can be said to have effective control the others’ decisions on workplace policy. Historically, the legal standard was “direct control” over the other company’s workers. The National Labor Relations Board, the main federal enforcement agency for union-related issues, changed that in 2015 to “indirect control.”
The board is also pursuing a case against McDonald’s Corp., saying that it is a joint employer with its franchisees, even though they are privately owned businesses that rent out the corporate brand. The labor board’s standard would make labor organizing easier by allowing the unions to target the corporate parent rather than going after individual franchisees.
Business groups argue that many would get out of franchising altogether rather than deal with the expanded liability and have made a major push to get Congress to rein in the labor board. Republican lawmakers introduced legislation in 2015 to rewrite the NLRA to codify the “direct control” standard. That legislation gained little traction, but an effort in this Congress has better odds since the GOP now controls the White House.
Since the last legislative push however, the Labor Department and related agencies like Occupational Safety and Health Administration and Equal Employment Opportunity Commission have made moves to adopt a similar legal standard on joint employer. Since those agencies are not covered by NLRA, many critics of the expanded standard think the rollback legislation needs broader language. An additional factor is that the NLRB’s standard has been invoked in private sector lawsuits as well.
A coalition of trade associations including the National Restaurant Association and the National Retail Federation laid out their issues in a February letter to the Education and Workforce Committee.
“In the months since August 2015, joint employer lawsuits have been brought primarily under the FLSA, but also under the Migrant and Seasonal Agricultural Workers Protection Act, Title VII of the Civil Rights Act, the Uniformed Services Employment and Reemployment Rights Act, the False Claims Act, the Equal Pay Act, and the Age Discrimination in Employment Act,” they wrote. “In addition, at the state level, plaintiffs’ lawyers have filed joint employment-based lawsuits under state workers’ compensation laws, state wage and hour laws and state and local human rights laws.”
