NLRB Ruling Puts More Companies on the Hook for Temporary Workers
28 August 2015 - 6:20AM
Dow Jones News
WASHINGTON—A federal labor ruling released Thursday could put
thousands of companies on the hook for workplace disputes and
union-organizing matters involving temporary and franchise
workers.
The National Labor Relations Board, in a 3-2 ruling splitting
the board on party lines, revised its "joint employer" standard for
determining when one company shares responsibility for employees
hired by another. The change will make it easier for unions to
negotiate over wages and benefits for pools of contingent
workers.
The change, fiercely opposed by many businesses, come at a time
when more companies are turning to temporary contract worker as
part of their business model. The ruling could also affect
arrangements at franchise companies such as McDonald's Corp. that
are in many instances a step removed from workplace matters at
their franchises.
The change alters a decades-old approach by the NLRB that said
one business couldn't be held liable for employment-related matters
at another unless they had direct control over the employees in
question. The NLRB is a federal board that referees workplace
disputes and oversees union-organizing elections.
The change was supported by the board's three Democrats, with
the two Republicans dissenting. The majority said the NLRB hasn't
kept pace with an evolving workplace in which an increasing number
of U.S. workers are employed through temporary staffing agencies.
They cited in their decision a "dramatic growth in contingent
employment relationships" that "potentially undermines the core
protections of the act for the employees impacted by these economic
changes."
The ruling came in a case where a Teamsters local union, the
Sanitary Truck Drivers and Helpers Local 350, 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 subcontracted workers hired through the staffing
agency.
In the past, companies generally had to share decision making on
employment matters such as firing, hiring and discipline in ways
the board said would have a meaningful effect on the workers. Under
the revised standard, the NLRB also will consider if a business
exercises indirect control through an intermediary, or has reserved
the right to do so. The board will consider this on a case-by-case
basis, board officials said Thursday.
"Our aim today is to put the board's joint-employer standard on
a clearer and stronger analytical foundation, and, within the
limits set out by the act, to best serve the federal policy of
'encouraging the practice and procedure of collective bargaining,'"
the Democrats said.
The board's dissenting Republicans said: "The result is a new
test that confuses the definition of a joint employer and will
predictably produce broad-based instability in bargaining
relationships."
Write to Melanie Trottman at melanie.trottman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 16:05 ET (20:05 GMT)
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