Think Tank Says NLRB Joint Employer Rule Harmful To Biz

Law 360 highlights Trey Kovacs's report on the National Labor Relations Board's new joint employer standard.

Competitive Enterprise Institute's report called on Congress to defund the NLRB’s implementation of the new joint employer framework, which was established last year by a divided five-member NLRB panel in a case involving Browning-Ferris Industries of California Inc.

Report author Trey Kovacs, a policy analyst at nonprofit CEI, said in a statement that the new joint employer rules “will mean greater uncertainty and exposure to liability for businesses already trying to weather tough economic times.”

“Many businesses will be surprised to find out that settling disputes with labor regulators or setting well-intentioned employment standards for contractors or franchisees, like paid leave or child care, may make both sides liable for labor disputes,” Kovacs said. “It seems no good deed goes unpunished.”

CEI also chided the NLRB for not issuing any guidance that discusses what demands an employer can place on another employer with which it does business that will trigger a joint employer relationship.

“Without a bright-line rule, employers do not know if current business-to-business contracts establish joint employer liability or whether agreements need amendment to avoid responsibility for others’ labor violations or bargaining responsibilities,” the report said. “With such a broad standard under Browning-Ferris, it will be unpredictable how the new policy will be applied in the future.”

Read the full article at Law 360.