Senate Republicans will make the case Tuesday for reining in the National Labor Relations Board, the main federal labor law enforcement agency, arguing that its recent efforts to expand the legal definition of a “joint employer” would hurt the economy.
Sen. Lamar Alexander, R-Tenn., chairman of the Health, Education, Labor and Pensions Committee, will lead the effort by holding a hearing on legislation dubbed the Protecting Local Business Opportunity Act. The hearing is part of coordinated effort by Republicans to head off the labor board’s efforts. House GOP lawmakers held a hearing earlier this week in the Education and the Workforce Committee on their version of the legislation.
Both bills would limit the legal definition of a joint employer to two or more businesses that have “actual, direct and immediate control” over a group of workers’ terms and conditions. The legislation effectively would undo a recent NLRB decision in a case called Browning Ferris that said a contractor can be considered the joint employer of a subcontractor’s employees.
The board also has a pending case against McDonald’s Corp. that could expand the definition to include corporate franchisers and their franchisees. It has solicited legal opinions on whether it should make companies that hire temp agencies also joint employers of the agencies’ employees. Both cases could vastly expand legal liability for businesses by making them responsible for labor practices at other companies. That could draw them into disputes with labor unions and make them vulnerable to labor board legal action. Labor leaders have applauded the moves.
The legislation comes as the White House has moved over the last few years to boost organized labor in various ways, including giving the five-member board a Democratic majority. Alexander’s hearing will be held the day before a White House “Summit on Worker Voice,” an event that will be heavily represented by labor organizations.
Alexander will present an alternative perspective, highlighting the concerns of small business owners, particularly owners of franchises, that their businesses will be jeopardized by the board’s moves. Many fear corporations will either pull out of franchising or demand more control over franchisees to lessen their legal liability. That would force many small business owners into making the unpleasant trade-off of losing control of their businesses or severing their ties with popular corporate brands.
“My franchiser has nothing to do with the day-to-day operations of my small business. But if they are to be considered a joint employer, my franchiser may decide to exert more control over my business, relegating me to a middle manager role for which I did not sign up,” Mara Fortin, owner of a California Nothing Bundt Cake franchise, told House lawmakers Tuesday.
It is likely to be a contentious hearing. The legislation has 44 Senate cosponsors, none of whom are Democrats. The House version has 44, only one a Democrat, Texas lawmaker Henry Cuellar. Organized labor donated an estimated $60 million to political candidates in 2014, 89 percent of it to Democrats, according to the Center for Responsive Politics.
