Labor Board Boosts Union Bosses With Ruling That Jeopardizes Jobs

Yesterday, folks from around the country enjoyed the Labor Day holiday by relaxing with their families at the end of long weekend. But while many people had the day off Monday, many businesses were still processing a recent ruling by the National Labor Relations Board (NLRB) that could have a lasting negative impact on millions of jobs. On Thursday, August 27, the NLRB voted along party lines to expanded the liabilities of employers as “joint-employers” and changed decades of labor policy that will impact how many companies have do business and will likely lead to harmful consequences for many workers.  According to the St. Louis Dispatch, “Previously, the NLRB had a direct-control standard, meaning that a company was a joint employer only if it actually gave orders to the workers or controlled their working conditions. Now, a company may be a joint employer even if it merely reserves the right to influence working conditions.”

The case involved Houston-based waste management company Browning-Ferris Industries and whether or not they were responsible for contract staffing they utilized for a facility in California. The NLRB ruled that Browning-Ferris was responsible for the contract employees, and in doing so set forth a precedent going forward that will cause many businesses to rethink how they operate with regards to contract staffing and franchises.

The 3-2 ruling is bad news for small businesses and franchisees.   According to The Hill:

Restaurants could see the biggest changes. Fast food chains such as McDonald’s and Burger King will likely assert more authority over — or even cut ties altogether with — local franchise owners, business advocates say…

Companies are already threatening to cut ties with staffing agencies that help recruit temporary workers and subcontractors that provide janitorial and security services because they don’t want to be responsible for another company’s employees.

Daniel Fisher with Forbes noted that the decision also reverses labor policy that had been commonplace:

In so doing, the board’s Democratic majority reversed several decades of practice where companies had to exercise “direct and immediate” control over workers with a new regime in which regulators will examine each case for signs a company has the potential to affect pay and working conditions. It will have a large impact on how franchisers like McDonald do business, since they can potentially be held liable for hiring and firing decisions by any of their thousands of individual franchisees. Even routine business decisions, like whether to fire a contractor or how to structure operations, will now be examined in light of how they affect union organizing efforts.

The Competitive Enterprise’s Vice-President Iain Murray summed up the troubling and partisan decision immediately after the ruling:

Yet another decision by unelected regulators, this time at the National Labor Relations Board, will have a devastating impact on American employers and employees. The decision will force franchise and contract businesses into a one-size-fits-all business model when it comes to liability and wage issues. That may be good for labor union bosses and trial lawyers in search of big targets of opportunity, but it will hurt anyone who now benefits from flexible work arrangements.

The new rules will most assuredly be fought in the courts, but even as that process plays out the average worker at a local franchise or staffing firm will feel the impact of the Browning-Ferris decision.  The decision is nothing more than a giveaway to crony union bosses who have donated to the Obama Administration. Organized Labor has been losing their grip on the American worker for decades and as technological advancements and economic innovation soars in the new sharing economy, union bosses are losing influence and power everyday. The NLRB ruling reverses the progress that has been made by independent entrepreneurship and traditional contract work.