December 8th, 2015
The labor ruling that’s now a hot-button political issue
Franchises are worried that a new labor law is going to put them out of business.
In a conference call promoted by the International Franchise Association (IFA), three lawmakers and a handful of business owners called for the adoption of language in the omnibus appropriations bill to void a recent ruling by the National Labor Relations Board, arguing that tens of thousands of small businesses may otherwise fail.
Calling the late August ruling a “radical overreach into the American dream,” Texas Rep. Bill Flores on Monday said the labor board’s decision held the potential to destroy “the entire franchise model.” Flores, a Republican, said he was “calling on this Congress to stand up for small business everywhere, (and) fortunately this week in Congress we have the chance.”
At least one supporter of the NLRB ruling sees those odds as long.
“The administration has been pretty clear they don’t intend to negotiate over what they call ‘ideological riders,'” said Bill Samuel, the AFL-CIO’s legislative director. “This is decision-making by an independent agency, it would be bad precedent for Congress or the White House to get involved.”
The regulatory action, seen as one of the more important shifts in labor rules, has gotten strong support from the AFL-CIO and the Teamsters Union, while the U.S. Chamber of Commerce and the IFA were among those decrying it.
“The chamber supports the joint employer rider and has been lobbying for it,” a spokesperson for the trade group emailed on Monday. “We hope it will be included in the spending bill.”
The NLRB decision dealt specifically with waste-management company Browning-Ferris Industries and its use of Leadpoint Business Services to staff a facility in California. The labor board found that Browning-Ferris should be viewed as a “joint employer” with the Phoenix-based staffing firm.
In its finding, the board said it was basing its decision on the indirect and direct control that Browning-Ferris held in determining the basic terms and conditions of the workers hired to clean and sort recycled products.
The 3-2 decision, which had the NLRB’s two Republican appointees dissenting, comes as an increasing number of companies are using staffing agencies to provide temporary employees, which has translated into a growing number of independent contractors who are not covered by the same protections as full-time employees.
“With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances,” the agency stated.
The number of workers employed through temporary agencies hit a record 2 percent of the U.S. work force by August 2014, the NLRB said in its decision. It also cited a projection that jobs in the employment services industry would increase to nearly 4 million by 2022, a development the agency said was “reason enough to revisit the board’s current joint-employer standard.”
A measure to override the NLRB decision was introduced in September by Republican sponsors, including Tennessee’s Lamar Alexander in the Senate and Minnesota’s John Kline in the House.
The bill could easily pass in the Republican-dominated House, but stands little hope of clearing the Senate, Samuel offered. “It’s an uphill climb for them.”
Countering that view was Nebraska Rep. Brad Ashford, a Democrat, who on Monday called the movement to reverse the NLRB’s ruling “a bipartisan effort” that includes a “50 to 60 Democrats who would look kindly on this measure.”