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NLRB Ruling in Joint Employer Cases Will Have Devastating Economic Impact

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In response to today's 3-2 ruling by the National Labor Relations Board expanding employers’ liabilities as so-called "joint employers," Competitive Enterprise Institute vice president for strategy Iain Murray offered the following statement:

Yet another decision by unelected regulators, this time at the National Labor Relations Board, will have a devastating impact on American employers and employees. The decision will force franchise and contract businesses into a one-size-fits-all business model when it comes to liability and wage issues. That may be good for labor union bosses and trial lawyers in search of big targets of opportunity, but it will hurt anyone who now benefits from flexible work arrangements.

For example, the NLRB’s new standard could force Silicon Valley startups to hire the receptionists and cleaners they currently get from staffing or property management companies. It will adversely impact the innovative sharing economy, where technology has drastically lowered transaction costs, enabling people to come together to share services in novel new business relationships. In the end, some jobs will be absorbed by companies’ corporate headquarters, to minimize unexpected liability; some jobs will be eliminated. The NLRB has set back the clock 40 years, to an era of corporate giants when few people had the option of being their own bosses while pursuing innovative employment arrangements.

Related: 

Federal Labor Agencies Ambush American Economy | Trey Kovacs
The Administration Is about to Upend American Business Practices | Iain Murray

The NLRB Joint Employer Cases | Aloysius Hogan