FOR IMMEDIATE RELEASE
Cara Prodanovich, 202-662-0769
Local Business Owners Slam NLRB Decision
Browning-Ferris ruling to expand joint employer definition makes businesses liable for employees they do not employ and threatens small business owners’ control of their operations
WASHINGTON, Aug. 27, 2015 – The Coalition to Save Local Businesses (CSLB) criticized the National Labor Relations Board’s (NLRB) decision today in the Browning-Ferris case, which will expand the definition of joint employer and significantly weaken local business owners’ control of their own companies.
“This decision throws a hand grenade at any small business that operates within the franchise model, serves as a subcontractor or engages in partnerships. If it is allowed to stand, it will have a chilling effect on existing and aspiring entrepreneurs, dampen economic activity and cost U.S. jobs,” said Ciara Stockeland, owner of MODE retail clothing stores and a member of the Coalition to Save Local Businesses.
Stockeland said that today’s action by the NLRB flies in the face of decades of common law. It throws out a standard that has long been recognized by the courts, businesses, the Internal Revenue Service, the Small Business Administration, Federal Trade Commission and even the NLRB itself, he added. Prior to today, to be deemed a joint employer, two or more companies must have exercised direct operational and supervisory control over an employee. Under this new interpretation, the NLRB is expanding that and applying a broader “economic realities” test to include not only direct control, but “indirect control” or even “potential, unexercised control”.
“The broad sweep of this decision is certain to have numerous and profoundly negative economic consequences for hundreds of thousands of American businesses and millions of American workers,” said Mariana Huberman, a CSLB Co-Chair and owner of a single The UPS Store location. “The abandonment of the definition of employer that has been a foundation of labor law will disrupt daily business operations in workplaces all over the country and stifle economic growth, job creation and innovation.”
If the NLRB’s decision to broaden the joint employer definition is allowed to take root, it would expand franchisor responsibilities and make them more liable for franchisees’ actions. For non-franchise businesses, any business relationship could be susceptible to a joint employer finding.
In anticipation of this decision and in direct response to ongoing regulatory overreach by the NLRB, a group of local business owners and industry leaders earlier this year launched the CSLB – a comprehensive lobbying, public affairs, media relations and grassroots campaign to preserve the now-redefined joint employer standard. The CSLB has spent months informing Members of Congress about the devastating impact that redefining the joint employer would have on their businesses and the overall U.S. economy. The coalition will soon ask Members of Congress to support legislation that would codify the decades-long and widely-accepted definition of what constitutes a joint employer.
“Small businesspeople deserve a government that supports and fosters their operations, not tears them down. Today the NLRB has harmed local businesses by ignoring its past decisions in the Southland, TLI, Laerco and Airborne Express cases that dealt with joint employer status over the past five decades. We will now turn to all champions of small business in Congress to make sure this politically-motivated ruling does not stand,” said Michael Layman, Executive Director of the Coalition to Save Local Businesses.
The Coalition to Save Local Businesses is led by more than twenty co-chairs from all over the country and is supported by a growing number of local business owners, concerned citizens and trade associations and their members. To learn more about the coalition visit the website, www.SaveLocalBusinesses.com.
The Coalition to Save Local Businesses represents thousands of local businesses and millions of American jobs through its membership and partner organizations. The coalition’s goal is to inform Members of Congress and others about the negative consequences decisions by the National Labor Relations Board to expand the definition of who can be held as a joint employer would have on local businesses and their employees across the country. The coalition is asking Congress to support legislation that would make permanent the long-standing and widely accepted definition of joint employer.