The NLRB is pursuing a new joint employer rulemaking that has the potential to destroy small businesses, the American Dream, and the economy. Under this expanded standard, nearly every contractual relationship between businesses will trigger joint employer status, making businesses responsible and liable for the employment practices of their franchisees, suppliers, vendors, contractors, and subcontractors.
Under the current standard, businesses can only be joint employers if they exercise direct and immediate control over the essential terms and conditions of employment for the same group of employees. The NLRB, however, is trying to make indirect or even just reserved, unexercised control sufficient to trigger joint employer status. This would be a radical and devastating expansion of the joint employer standard.
Under this new rule, businesses will be forced to protect themselves against significantly more liability and obligations under the law. The franchise business model, for example, would be gutted, as the larger franchisor will move to end or limit their support to franchisees or exert increased authority over them, essentially turning those small business owners into employees. The new standard would also force larger companies to subsume local small businesses rather than work with individually owned enterprises, stifling entrepreneurship, business innovation, and flexibility. The expanded standard even hampers businesses’ efforts to encourage “corporate responsibility” among their business partners to the detriment of workers, consumers, and their communities.
This new joint employer standard would devastate the economy. Tell the NLRB to abandon this misguided policy and protect local small businesses and the American Dream!