The National Retail Federation welcomed the vote by the National Labor Relations Board to reverse a controversial expanded definition of a “joint employer” adopted during the Obama administration that has increased businesses’ exposure to lawsuits.
“This is an important move to restore the common-sense definition of what constitutes this type of employment relationship that stood for decades,” NRF Senior Vice President for Government Relations David French said. “The board’s 2015 decision created an impossible scenario where one business could unfairly and improperly be held accountable for the actions of another business. Today’s vote puts an end to those harmful and unnecessary changes that exposed companies to almost limitless liability.”
The NLRB voted 3-2 to reverse its own 2015 ruling that waste management company Browning Ferris Industries could be considered a joint employer with Leadpoint Business Services, a staffing agency it subcontracted, even if it had only indirect or unexercised control over Leadpoint’s workers. The 2015 ruling contradicted guidelines followed for more than 30 years that said a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be a joint employer.
Today’s vote overturned the Browning-Ferris ruling and reinstated the previous standard requiring direct control.
Today’s action by the NLRB comes just over a month after the House voted 242-181 to pass the Save Local Business Act, legislation supported by NRF that would have overturned the Browning-Ferris decision if the NLRB had not acted. Despite today’s action, NRF believes legislation is still needed in order to provide a permanent solution on the joint employer issue.