Just a month after a controversial decision involving
employees of McDonald's Corp. franchisees, businesses are bracing for a
new action by federal labor regulators that could lower the barriers between
companies and the contract workers they use. The National Labor Relations Board
is re-evaluating its decades-old standard for deciding when contractual
business arrangements render one business a "joint employer" of
workers employed by another. It is using a case in which a union wants a company
at the table in collective bargaining involving subcontracted workers.
These joint-employer cases are the latest battle over the
application of labor laws at a time when businesses are increasingly turning to
contract workers. U.S. staffing companies employed an average of 3 million
temporary and contract workers a week in 2013, up 4% from 2012.
If the standard is changed, employers say all kinds of
businesses could be affected. Unions say such arrangements enable companies to
exercise control over wages and working conditions but escape responsibility
when workers have problems or demands. But as labor groups ask the five-member
NLRB to declare more companies joint employers, business groups are fighting
back, saying such moves could defeat the efficiencies of contracting and expose
companies to greater liability in labor matters.
Unions and their allies say business groups exaggerate the
scope and impact of a revision. They say they're not suggesting that all
subcontractors should be joint employers, but cite the growing
temporary-staffing industry as one example of why the standard needs changing.
For the past 30 years, the NLRB, a federal agency that
settles workplace disputes, has said that one business couldn't be held liable
for employment-related matters at another unless they had direct control over
the employees in question.
Then came the McDonald's case, which began when the NLRB
received complaints alleging McDonald's and its franchisees had violated the
rights of employees involved in protests against them. After finding merit in
some of the complaints, the NLRB's general counsel's office issued its opinion
that the company should be considered a joint employer in the matters.
In the contracting case, a Teamsters local union has asked
the NLRB to consider Browning-Ferris Industries of California Inc. and
Leadpoint Business Services, a Phoenix-based staffing firm that provides the
company with temporary workers, joint employers of a group of those workers for
collective bargaining purposes. The union says it can't adequately bargain over
their terms and conditions of employment unless Browning is at the table as a
joint employer.
The union says the plant is an integrated single operation
where Browning dictates the hours and duties of all the workers, including its
own and Leadpoint's. There are no examples on record in which Leadpoint has
rejected or refused Browning's directions.
But the companies say their continuing 2009 contract states
that Leadpoint is the "sole employer" of the personnel and that Browning
doesn't have responsibility to supervise those workers, who have their own
on-site management.
The union asked the board to review the dispute after an
NLRB acting regional director sided with the companies. The NLRB agreed but
went even further by asking for input on whether it should update the joint
employer standard.
The NLRB's general counsel in a brief filed in response to
the board's call for input urged it to adopt a standard that would make no
distinction between direct, indirect, and potential control over working
conditions. The Browning case is pending review before the five-member board.
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