WASHINGTON--(BUSINESS WIRE)--The National Retail Federation applauded today’s congressional hearing exploring the impact of the National Labor Relations Board and Labor Department’s Obama era expansion of joint employer standards, which have increased businesses’ exposure to lawsuits and unionization efforts.
“Under the broader standard, the NLRB created the impossible scenario in which one business can be held liable for the actions of another entirely independent business such as a subcontractor or franchisee,” NRF Senior Vice President for Government Relations David French said. “These harmful and unnecessary changes have resulted in seemingly limitless liability in business-to-business relationships and a significant lack of certainty for millions of retailers nationwide.”
“To make matters worse, the Department of Labor followed in the board’s footsteps and issued its own sweeping guidelines,” French said. “DOL’s guidance compounded the uncertainty created by the NLRB and has led to dramatic increases in growth-chilling litigation in industries across the country.”
The Labor Department dropped its expanded standards in June following the election of President Trump but the NLRB standards remain in place.
“Until the issue is addressed in a wholesale fashion by Congress, retailers will continue to face unlimited and unpredictable joint employer threats that slow job creation and entrepreneurship,” French said. “NRF looks forward to working with this committee to advance legislation that establishes a commonsense standard of joint employer liability under federal labor laws and provides employers with lasting certainty in labor relations.”
French’s comments came in a letter to House Committee on Education and Workforce Chairwoman Virginia Foxx, R-N.C., and Ranking Member Bobby Scott, D-Va.
Guidelines released in January 2016 by the Labor Department’s Wage and Hour Division said that two companies that are only technically separate – such as different divisions of the same corporate parent – could be considered joint employers. The agency also said a company could be considered a joint employer of workers hired by an intermediary such as a staffing agency.
Similarly, in an August 2015 ruling involving the waste management company Browning Ferris Industries and staffing agency Leadpoint Business Services, the NLRB said a company could be considered a joint employer even if it had only indirect or unexercised control over workers. In a separate case, the NLRB said McDonald’s could be considered a joint employer with its restaurant franchisees. Under guidelines followed for more than 30 years before the ruling, the NLRB held that a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be considered a joint employer.
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.