Business groups are warning that a recent move by the
National Labor Relations Board, the federal labor law enforcement agency, to expand
the legal definition of a "joint employer" is likely to affect much
more than just federal labor law.
The move could spur other federal agencies
and civil courts to use a similarly broad standard for defining what an
employer is in enforcing any law related to the workplace, such as the
Occupational Safety and Health Act or equal opportunity laws.
The Chamber of Commerce, the nation's leading business
lobby, made the case at a forum hosted at its headquarters Friday and in a new
study it released the same day. The Chamber's experts warned that there was
already signs that the new standard the board has called for was being adopted
elsewhere by the government.
"Even if we win here [against the board], we could
still find ourselves under the gun regarding the joint employer standard,"
said Robert McDevitt, senior vice president of franchising for Golden Corral
restaurants, a panelist at the event. "To a large extent, the horse is
already out of the barn."
In December, the National Labor Relations
Board charged the McDonald's Corp. as a "joint employer" with its
individual franchises in a series of unfair labor practice complaints, in
effect, arguing that the worker plaintiffs had two bosses: the local business
that paid them and the corporate parent. The board's general counsel,
Richard Griffin, argued that the corporation's franchising contracts gave the
company enough "indirect control" over the restaurants' daily
operations that they were in effect an employer.
The move and the board's arguments defending it have
alarmed business groups since franchises were previously understood to be
legally separate businesses — most are local entrepreneurs who contract for the
right to use the corporate brand. The board's critics, including the Chamber,
have warned that the move will undermine franchising. Corporations will either
refuse to accept the extra liability or demand control over the franchises, which
the local owners won't want to relinquish.
The Chamber expanded its argument Friday, warning that
other federal agencies could adopt the same standard for measures such as the
the Civil Rights Act or the Americans with Disabilities. Those laws use the same
basic language as the National Labor Relations Act to define an employer.
"By loosening the joint employer standard, employer
coverage under such statutes would explode. This would essentially eliminate
carefully negotiated small business exceptions in these federal statutes,"
the chamber argued in a study released Friday.
Glenn Spencer, vice president of the chamber's Workforce
Freedom Initiative, warned that the "indirect control" standard could
be applied to any number of business relationships. "If you have a
supplier where you are the main customer... then you become the joint employer
under that standard," Spencer said. That's because in that scenario, the
supplier's dependency on the customer gives the customer influence over the
supplier's hiring and firing.
That, in turn, would attract litigation, the critics
argue. "When you have ambiguity in statutory language it invites
litigation and regulatory overreach," said Paul DeCamp, a management-side
labor lawyer.
The chamber's report argued that the board's standard
could, for example, come into play in cases involving Obamacare. That law
requires employers of 50 or more people to offer health care coverage or pay a
penalty. A broader definition of employer could result in some companies
finding themselves obligated to provide health care to employees of smaller
companies they do business with if the government decides that relationship is
sufficiently close.
The report noted that 10 employees in a Virginia
McDonald's franchises had filed race discrimination and sexual harassment
charges with the Equal Opportunity Employment Commission in January against the
corporate parent.
In that case, the commission may be ahead of the board.
It said in a brief filed last year in the case Browning-Ferris Industries,
another closely watched board case involving the joint-employer standard, that
it already uses a broader standard.
"The EEOC urges the board to adopt the same
joint-employer standard that the EEOC uses. The EEOC's standard is more
flexible, more readily adaptable to evolving workplace relationships and
realities, and more consistent with the goals of remedial legislation such as
(The Civil Rights Act's ) Title VII," it said.
Source: Washington
Examiner
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