House Republicans will push the case for killing an Obama administration-era legal standard that vastly expanded the potential liability that companies face for workplace law violations.
GOP members argue that former President Barack Obama’s expansion of the “joint employer” standard — when one business can be held responsible for violations by another employer — could do major harm to the economy by forcing businesses to avoid activities, such as franchising, that expose them to liability under the rule.
The Trump administration has moved to retract the policy. Labor Secretary Alexander Acosta this month issued a statement that the department would return to the pre-Obama standard that liability applied only if a company had “direct control” over another employer’s workers. Acosta’s predecessor, Tom Perez, had extended the legal standard to include the much vaguer “indirect control.”
However, the National Labor Relations Board, the main federal labor law enforcement agency, still uses the indirect control standard. The board’s members are appointed by the president and confirmed by the Senate, but it otherwise operates independently. Rep. Virginia Foxx, R-N.C., chairwoman of the House Education and the Workforce Committee, will hold a hearing Wednesday to make the case against that policy.
“So many individuals have achieved the American Dream by starting and running a small business. Unfortunately, the Obama administration and partisan NLRB bureaucrats seemed determined to make it harder for small businesses and their employees to succeed, and the job-killing joint employer scheme is a prime example. It is my hope that hearing firsthand accounts of the damage caused by the NLRB’s overreaching decision will bring this issue the attention it deserves, and that it will bring all of us closer to finding a solution for it,” Foxx said.
President Trump has nominated two people for the remaining open seats on the five-member labor board. Senate confirmation of those picks would give board Chairman Philip Miscimarra, who was appointed to that position by Trump, a Republican majority capable of rolling back the board’s joint employer rule. Business trade associations nevertheless have been pushing Congress to codify the pre-Obama standard into law. Republican lawmakers pushed such legislation in the previous Congress, but it gained little traction owing to Obama’s almost-certain veto.
