REPORT: Joint-Employment Could Upend Unsuspecting Businesses

Inside Sources highlights Trey Kovacs's report on the unsuspecting ways the National Labor Relations Board's joint employer rule could impact businesses. 

The National Labor Relations Board (NLRB) has worked to expand the criteria for its joint-employer standard. The board can now more easily make an employer liable for the employees of another company it contracts with. The Competitive Enterprise Institute warns the new standard will impact businesses in many unanticipated ways.

“The NLRB has failed to issue guidance on what demands one employer may place on another employer with which it does business that will trigger a joint employer relationship,” the report detailed. “Employers do not know if current business-to-business contracts establish joint employer liability.”

“One of the unanticipated ways the joint employer standard could increase liability for employers that engage with contractors is via Corporate Social Responsibility (CSR) policies,” the report continued. “Which companies use to place basic conditions on a supplier before contracting with them.”

CEI warns the new standard could radically change entire business models. Businesses could be disincentived from entering into contractual relationships which are critical for ventures like franchising. The NLRB defended its new standard in 2014 during an ongoing case involving McDonald’s.

Read the full article at Inside Sources.