What if you could get in legal trouble simply because you knew somebody else who got in trouble? You didn’t do anything wrong with them. Or tell them to do anything wrong. Or even know that they were going to do something wrong and fail to tell others. But, theoretically, you could have stopped them if you had known.
It seems ludicrous, and yet that is what federal labor regulators want to do to American businesses nationwide with a new policy called “reserve control.”
The National Labor Relations Board has a new regulation that potentially holds one business responsible for the workplace violations at another business if the former has “reserved control” over the latter. “Reserved control” is the potential power to influence another. You don’t have to have actually exercised it; you just might, someday.
This was part of the agency’s updated “Joint Employer” rule issued late last month. “Joint employer” is the term for when one business can be said to control another business, such as a contractor hiring a subcontractor, triggering responsibility for any labor violations by the other business. Traditionally, this type of liability required the first business to have “direct control” over the second business’s decisions.
That changed during the Obama administration, when Democrats grew frustrated with the proliferation of franchises, contractors and freelancers that were difficult to regulate or organize for union purposes. Democrats appointed to the NLRB began pushing to make “indirect control,” a term of art with no clear definition, the new standard. In theory, any company could be said to have indirect control over any other company it does business with — which could be anything regulators deem it to be. Indirect control drastically lowers the standard a NLRB regulator would need to bring a case.
Read the full article on The Hill.