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In an unsurprising response to the NLRB’s recent decision to expand the joint employer standard (as reported here), Republicans in the U.S. House introduced the Protecting Local Business Opportunity Act on September 9. The two paragraph bill has one mission – to change the joint employer standard back to its previous standard. 

The NLRB’s decision to amend the joint employer standard now qualifies employers with indirect control, or even those who reserve the right to control but do not exercise that right, to be joint-employers. The NLRB has complaints pending against the McDonald’s restaurant franchise that would consider the application of the new joint employer standard to the franchise industry in particular. Nonetheless, the NLRB’s decision shook the franchise industry, threatening the franchisor/franchisee relationship as it has been known for decades. 

The  short bill simply provides that the National Labor Relations Act would be amended to include the following: “two or more employers may be considered joint employers for purposes of this Act only if each shares and exercises control over essential terms and conditions of employment and such control over these matters in actual, direct, and immediate.” 

The biggest fear of those in the franchising industry is that with the new joint employer standard many more employees will have the ability to come forward and assert collective bargaining rights. Congressional Republicans see the NLRB’s decision as an attack on small businesses. The bill’s sponsors provided: “[t]he NLRB’s new joint employer standard would make big businesses bigger and the middle class smaller by discouraging companies from franchising and contracting work to small businesses.” 

There is no Democratic support for this bill yet, and thus its future currently does not look bright. We will continue to monitor and report any developments on this topic.  

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