Business groups on Thursday renewed their push to roll back the Obama administration’s “joint employer” doctrine, a potentially vast expansion of corporate legal liability, calling on lawmakers from 19 states to back federal legislation.
The letters, signed by local business owners, noted that their states recently had adopted regulations limiting joint employer liability and urged the Capitol Hill lawmakers to follow those examples and get Congress to do the same.
“While [a] new state law is a constructive development, unfortunately it is still pre-empted by the National Labor Relations Act,” the letters note. The International Franchise Association, a trade group, organized the effort.
The push appears to be gaining steam. Eight more members of Congress have signed onto the Save Local Business Act, the main House vehicle to counter joint employer. The bipartisan legislation now has 112 co-sponsors, mostly Republicans, up from 30 in less than a month.
“More and more members of Congress are hearing from job creators and workers in their districts who are concerned about the harmful impact of the joint employer decision, and they are asking their representatives to provide clarity. We are going to continue educating others about this issue and working to add additional co-sponsors over the coming weeks,” said Seth Morrow, spokesman for Rep. Bradley Byrne, R-Ala., lead sponsor of the legislation.
The legislation would prohibit the National Labor Relations Board, the main federal labor law enforcement agency, from implementing the doctrine.
Joint employer refers to when one business can be held legally liable for workplace law violations by another business. Prior to 2015, the legal standard for that was “direct control,” but following a case called Browning Ferris, the NLRB changed the standard to the much vaguer “indirect control.”
The switch has greatly alarmed businesses, especially those that franchise their brand. They fear it could lead to businesses being held liable for actions by companies they have little connection with.
Thursday’s letters targeted lawmakers in Alabama, Arizona, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Michigan, New Hampshire, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.
“Franchise business owners and constituents from across the country have seen their state legislatures act to protect their local businesses from the impact of expanded joint employment liability, however, state law is pre-empted by federal labor laws, so no real relief is coming their way until Congress passes Congressman Byrne’s [legislation],” added Michael Layman, the franchise group’s vice president of federal government relations.
