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CDW Applauds Congress for Passing Resolution to Nullify NLRB’s Disastrous Joint Employer Rule

On April 10, the Senate passed HJRes 98, a Congressional Review Act resolution to nullify the NLRB’s joint employer final rule. The resolution already passed the House, meaning the bill is headed to President Biden’s desk for signature.

The following can be attributed to CDW Chair Kristen Swearingen:

“The NLRB’s final rule was a massive expansion of the joint employer standard that would have violated the NLRA and common law. It would have created widespread confusion throughout the economy and jeopardized millions of small businesses. That’s why both federal courts and Congress have moved to nullify it before it could take effect.

“CDW applauds the Senate for taking this step to protect the economy and specifically the small businesses that would have been devastated by this rulemaking. We now urge President Biden to sign this bill into law. Doing so will provide certainty to American businesses, stabilize labor relations, and rein in the Board’s egregious actions.”

Joint Employer Rulemaking Nullified by Federal Court

On March 8, the District Court for the Eastern District of Texas invalidated the NLRB’s joint employer final rule, finding it too broad and in violation of the NLRA. As Judge Barker stated, the rule “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly … essential terms and conditions of employment.”

The following statement can be attributed to CDW Chair Kristen Swearingen:

“CDW applauds the District Court for recognizing what this rulemaking was – a massive expansion of the joint employer standard that would have violated both the NLRA and the common law and would have created widespread confusion throughout the economy.

“With this rule, the Board was attempting to place unions in the middle of routine business to business agreements, and the result would have been devastating for small businesses nationwide. If implemented, the rule would have destabilized labor relations and put at risk nearly every contractual relationship across the economy.

“Thankfully, Judge Barker saw through the Board’s efforts. His decision has protected American workers, businesses, and the economy from the chaos this rule would have created.”

CDW Supports Bills to Protect Workers from a Rogue NLRB

Washington D.C. – On December 12, CDW sent a letter to the House Education and the Workforce Committee in support of the Employee Rights Act (ERA) (H.R. 2700), Modern Worker Empowerment Act (H.R. 5513), and Save Local Business Act (H.R. 2826). The bills would protect workers, entrepreneurs, and small businesses from the biases and misinformed actions of the National Labor Relations Board (NLRB or Board). 

The following statement can be attributed to CDW Chair Kristen Swearingen:

“CDW thanks the Subcommittee on Health, Employment, Labor, and Pensions for holding a hearing to examine bills that prioritize workers’ freedom of choice at the same time as the NLRB threatens to strip it away. The Board’s approach is damaging to workers and small businesses and CDW urges the House of Representatives to pass these bills to reign in the NLRB.”

BUSINESS GROUP CHALLENGES NLRB’S JOINT EMPLOYER RULE IN COURT

On November 9, the Coalition for a Democratic Workplace (CDW), along with the U.S. Chamber of Commerce, American Hotel and Lodging Association, Associated Builders and Contractors, Associated General Contractors of America, International Franchise Association, Longview Chamber of Commerce, National Retail Federation, National Association of Convenience Stores, Restaurant Law Center, Texas Association of Business, and Texas Restaurant Association, filed a lawsuit against NLRB in the U.S. District Court for the Eastern District of Texas over the final joint employer rule.

The following statement can be attributed to CDW Chair Kristen Swearingen:

“The NLRB’s joint employer rule is an unlawful attempt to place unions in the middle of routine business to business, franchise and licensing agreements. The rule makes it far more complicated for larger companies to contract, franchise or license with small businesses. The Board’s rule will undermine entrepreneurial and economic opportunities that generate thousands of jobs.”

CDW Blasts NLRB for Issuing Final Joint Employer Rule that Will Create Massive Confusion and Threaten Workers’ Economic Opportunity

On October 26, the NLRB released its final rule on determining joint employer status under the NLRA, which would radically expand the joint employer standard under the NLRA. By explicitly stating that either possessing the authority to control one or more essential terms and conditions of employment (regardless of whether it is exercised) OR exercising the power to control indirectly one or more essential terms and conditions of employment (regardless of whether the power is exercised directly) is sufficient to establish an entity’s status as a joint employer, the final rule expands upon the damaging policy adopted in the Obama-era Browning-Ferris Industries (BFI) decision.

The following statement can be attributed to CDW Chair Kristen Swearingen:

“Today, the NLRB finalized its latest policy designed to dramatically destabilize labor-management relations at the behest of labor unions and at the expense of workers, entrepreneurs, and businesses. The final joint employer rule represents a sweeping expansion to the standard used for determining when two or more employers are jointly responsible for a group of employees and flies in the face of federal law, congressional intent, and court precedent.

“Today’s final rule effectively holds that either indirect or reserved control may stand alone as basis for finding a joint employer relationship, and that the mere existence of either is a definitive indicator – and not merely probative – of joint employer status, making the policy more drastic in scope than the damaging Obama era-standard adopted in BFI. In his dissent, Member Kaplan rightly states that the final rule ‘is potentially even more catastrophic to the statutory goal of facilitating effective collective bargaining, as well as more potentially harmful to our economy, than the Board’s previous standard in BFI.’

“The Board has adopted a policy that will create widespread confusion for business operations and threaten nearly every contractual relationship nationwide by disincentivizing larger companies from contracting, franchising, or licensing with small and local businesses. In doing so, the final rule undermines the millions of workers that rely on the entrepreneurial and economic opportunities generated through these business models.

“Simply put, the Board must stop catering to the demands of organized labor and focus its efforts on supporting American workers, business owners, and economic growth by fulfilling the true intent of the NLRA.”

NLRB’s Radical Joint Employer Rule Will Destroy Economic Prosperity and Limit Entrepreneurial Opportunity

Washington, DC – On December 7, the Coalition for a Democratic Workplace filed comments in response to the NLRB’s notice of proposed rulemaking altering the joint employer standard under the NLRA. As our comments explain, the proposed rule will undermine collective bargaining and destabilize labor relations, is arbitrary and capricious, and diverges from the common law. It ignores federal law, Congressional intent, and court precedent and, in doing so, threatens existing economic relationships and future opportunities for millions of entrepreneurs.

The following statement can be attributed to CDW Chair Kristen Swearingen:

“The joint employer standard created by this rule won’t help ensure workers can collectively bargain with the appropriate employers but will actually force businesses to the negotiating table that have no involvement in the workers’ terms and conditions of employment. The standard calls into question routine contractual terms, like quality control standards, workplace safety requirements, or hours of operation, and decimates businesses’ corporate social responsibility initiatives to the detriment of their workers, their consumers, and their communities.

“This radical proposal will destabilize labor relations and potentially destroy business models that have furthered the nation’s economic progress, created entrepreneurial opportunities for Americans nationwide, and provided millions of jobs to the nation’s workforce.

“The Board is once again pursuing extreme policies to further a radical agenda rather than trying to fulfill their statutory obligations to act as a neutral arbiter of the law and stabilize labor relations. This is simply bad policy that will achieve bad results. The Board should abandon this rulemaking in its entirety.”

 

CDW Sends Letter to House Committee Cautioning against PRO Act, NLRB Overreach

Washington, DC – On September 12, CDW sent a letter to the House Education and Labor Committee expressing serious concerns with the Protecting the Right to Organize (PRO) Act and recent activity and policies pursued by the National Labor Relations Board (NLRB) and its General Counsel, Jennifer Abruzzo.

The following statement can be attributed to CDW Chair Kristen Swearingen:

“Economic analyses have proven that the PRO Act would have devastating consequences for the economy. It would cause economic upheaval at a time when our economy is still struggling with recovering from the COVID-19 pandemic. Inflation is rising, fears of a recession are top of mind, supply chains continue to lag behind demand, and workforce shortages are limiting economic growth. Particularly concerning at this moment in time is the PRO Act’s provision removing the 70-year ban on secondary strikes. As seen by the recently threatened rail strike, this provision alone could shut down the country’s supply chain. Surveys have also shown that the PRO Act is not supported by the public. Congress should abandon the PRO Act and work towards helping the economy get back on track.

“At the same time as Congress pursues this misguided legislation, the NLRB and General Counsel Abruzzo are attempting to rewrite labor law to force unions on workers whether they want one or not. They are trying to eliminate secret ballots in union representation elections and wipe out employers’ First Amendment rights during union organizing campaigns. They are putting employers in an impossible position by forcing them to tolerate discriminatory behavior in the workplace despite the clear violation of federal anti-discrimination laws that such tolerance would require. The Board is pursuing a new joint-employer standard that would destroy small and local businesses. This NLRB and General Counsel Abruzzo are pursuing radical policies without any consideration for the damaging effects they will cause for the regulated community.

“And now, there are allegations that NLRB staff are colluding with labor unions in representation elections and unfair labor practices cases against specific employers. This is simply beyond the pale. The NLRB is supposed to be a neutral arbiter of the law, and instead, staffers are tilting the balance in favor of their preferred side.

“Congress should demand the NLRB and General Counsel Abruzzo stop rewriting labor law to impose their own beliefs on the nation’s economy. The economy simply cannot right itself while simultaneously struggling to keep up with the never-ending radicalization of labor policy.”

NLRB Releases Radical Proposal to Dramatically Expand Joint Employer Liability

Washington, D.C. – On September 6, the Coalition for a Democratic Workplace issued the following statement in response to the National Labor Relations Board’s newly released proposed rulemaking that would radically expand the joint employer standard under the NLRA, creating massive confusion for business operations and labor relations nationwide, inviting unnecessary and costly litigation, and imposing unwarranted liability.

The following can be attributed to CDW Chair Kristen Swearingen:

“Today, the NLRB launched its effort to radically alter labor-management relations, upending years of precedent and jeopardizing the stability of vital business relationships and the American economy overall. The Biden NLRB is threatening to put at risk nearly every contractual relationship nationwide by dramatically expanding the standard used to determine when two or more employers are jointly responsible for a group of employees.

“The NLRB’s proposed rulemaking is more damaging than we anticipated. The proposal goes beyond the controversial Obama-era BFI Board decision by requiring a joint employment determination based on ambiguous concepts of indirect and reserved control. As NLRB Members Kaplan and Ring explained clearly in their dissent, the proposed rule ‘would not merely return the Board to the BFI standard but would implement a standard considerably more extreme than BFI.’

“Whether by accident or design, the proposal disincentivizes larger companies from contracting, franchising or licensing with small and local businesses by injecting uncertainty and unnecessary liability into business relationships. The end result is fewer opportunities for entrepreneurs wishing to invest in their local economy, fewer local jobs, and fewer options for consumers.

“The Board failed to provide any justification for this proposed radical change, which is less clear and harder to apply than the existing 2020 rule, and ignored the DC Circuit’s clear rebuke for ‘oversh[ooting] the common-law mark’ with its BFI decision.

“Members Kaplan and Ring stated in their dissent, ‘The Act’s purpose of promoting collective bargaining is best served by a joint-employer standard that places at the bargaining table only those entities that control terms and conditions that are most material to collective bargaining.’ CDW could not agree more. It’s time for the Board to stop pursuing radical policies at the behest of labor unions, start abiding by the true intent of the Act, and consider the real-life implications of their actions on American workers, business owners, and the economy.”

 

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About The Coalition for a Democratic Workplace

CDW is a broad-based coalition of hundreds of organizations representing hundreds of thousands of employers and millions of employees in various industries across the country concerned with a long-standing effort by some in the labor movement to make radical changes to the National Labor Relations Act without regard to the severely negative impact they would have on employees, employers, and the economy. CDW was originally formed in 2005 in opposition to the so-called Employee Free Choice Act (EFCA) – a bill similar to the PRO Act – that would have stripped employees of the right to secret ballots in union representation elections and allowed arbitrators to set contract terms regardless of the consequence to workers or businesses.

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CDW Statement on DOL’s Proposal to Rescind its Joint Employer Final Rule

Washington, DC – On March 12, the Department of Labor issued a proposal to rescind its Final Rule on the joint employer standard under the Fair Labor Standards Act. CDW strongly disagrees with the Department’s efforts to eliminate this clear, easy-to-understand standard that brought much needed clarity to a complex issue.

CDW Chair Kristen Swearingen stated, “The Final Rule encouraged business-to-business cooperation and corporate social responsibility while ensuring the appropriate entities were held accountable to their employees. DOL’s efforts to undo this helpful standard will only result in more uncertainty for the employer and employee communities and more litigation as well as put potential obstacles in the way of our nation’s supply chains – all at a critical time for our nation’s economic and health recovery from COVID-19. CDW strongly urges the Department to reconsider this decision.”

CDW Statement on NLRB’s Joint Employer Final Rule

Washington, DC – On February 25, the NLRB issued its Final Rule on the joint-employer standard under the National Labor Relations Act. The Final Rule reinstates the traditional joint-employer standard while further clarifying the standard by providing valuable definitions for key terms.

CDW applauds the Board for finding a comprehensive solution to this complex issue. This Final Rule ensures employers have the stability and predictability necessary to run their businesses, continue to expand, and create more jobs. This bright line rule provides employers and employees alike with clear understanding of how the joint-employer standard will be implemented and interpreted. It successfully ensures employers are held accountable to their employees while protecting them from wrongful liability.