23 July 2019

Who's the Boss for Contract Workers?

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Just a month after a controversial decision involving employees of McDonald's Corp. franchisees, businesses are bracing for a new action by federal labor regulators that could lower the barriers between companies and the contract workers they use. The National Labor Relations Board is re-evaluating its decades-old standard for deciding when contractual business arrangements render one business a "joint employer" of workers employed by another. It is using a case in which a union wants a company at the table in collective bargaining involving subcontracted workers.

These joint-employer cases are the latest battle over the application of labor laws at a time when businesses are increasingly turning to contract workers. U.S. staffing companies employed an average of 3 million temporary and contract workers a week in 2013, up 4% from 2012.

If the standard is changed, employers say all kinds of businesses could be affected. Unions say such arrangements enable companies to exercise control over wages and working conditions but escape responsibility when workers have problems or demands. But as labor groups ask the five-member NLRB to declare more companies joint employers, business groups are fighting back, saying such moves could defeat the efficiencies of contracting and expose companies to greater liability in labor matters.

Unions and their allies say business groups exaggerate the scope and impact of a revision. They say they're not suggesting that all subcontractors should be joint employers, but cite the growing temporary-staffing industry as one example of why the standard needs changing.

For the past 30 years, the NLRB, a federal agency that settles workplace disputes, has said that one business couldn't be held liable for employment-related matters at another unless they had direct control over the employees in question.

Then came the McDonald's case, which began when the NLRB received complaints alleging McDonald's and its franchisees had violated the rights of employees involved in protests against them. After finding merit in some of the complaints, the NLRB's general counsel's office issued its opinion that the company should be considered a joint employer in the matters.

In the contracting case, a Teamsters local union has 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 those workers for collective bargaining purposes. The union says it can't adequately bargain over their terms and conditions of employment unless Browning is at the table as a joint employer.

The union says the plant is an integrated single operation where Browning dictates the hours and duties of all the workers, including its own and Leadpoint's. There are no examples on record in which Leadpoint has rejected or refused Browning's directions.

But the companies say their continuing 2009 contract states that Leadpoint is the "sole employer" of the personnel and that Browning doesn't have responsibility to supervise those workers, who have their own on-site management.

The union asked the board to review the dispute after an NLRB acting regional director sided with the companies. The NLRB agreed but went even further by asking for input on whether it should update the joint employer standard.

The NLRB's general counsel in a brief filed in response to the board's call for input urged it to adopt a standard that would make no distinction between direct, indirect, and potential control over working conditions. The Browning case is pending review before the five-member board.

Click here to access the full article on The Wall Street Journal.

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