Rounds Cosponsors Legislation to Roll Back NLRB Decision

Rounds Cosponsors Legislation to Roll Back NLRB Decision

WASHINGTON—U.S. Senator Mike Rounds (R-S.D.) signed on as an original cosponsor to legislation that would roll back the National Labor Relations Board’s (NLRB) “joint employer” decision, which the chairmen of the House and Senate labor committees say “threatens to steal the American dream from owners of the nation’s 780,000 franchise businesses and millions of contractors.” The Protecting Local Business Opportunity Act would roll back the NLRB ruling and reaffirm an employer must have “actual, direct and immediate” control over an employee to be considered a joint employer.

“Once again, this Administration and the NLRB have bypassed Congress with their joint-employer ruling that would have major repercussions for millions of Americans who provide work as subcontractors and hundreds of thousands of franchise owners,” said Rounds. “Under this new standard, franchises could be held liable for the wage and hiring practices of its franchisee owners –removing any incentive for a corporation to sell franchises. Our legislation would overturn the NLRB decision and restore a legal standard for determining who is a joint employer.”

For approximately 40 years, federal labor policies held that two separate employers are “joint employers” if both employers have direct and immediate control over employment terms and working conditions, such as being responsible for tasks like hiring and firing, setting work hours, issuing direction to employees, determining compensation and handling day to day record keeping.

Under a new standard adopted last month by the National Labor Relations Board (NLRB) in a case involving Browning Ferris Industries (BFI), a 3-2 partisan majority said that merely “indirect control” or even “unexercised potential” to control working conditions will now make two separate employers joint employers. This new standard will be applied retroactively.

The new standard means that in many more cases multiple employers will have to jointly negotiate working conditions with unions and share liability for labor law violations. As a result, larger business will exert greater control over the smaller employer who actually owns and operates the business, such as stores, restaurants and day care centers. Additionally, fewer employers will parcel out business to local subcontractors, suppliers or subsidiaries, for fear that they will now be liable for the subcontractor’s employment decisions. Millions of employees will also lose the ability to negotiate things like pay, hours and leave time with their direct supervisor, because those decisions will now be made between the larger employer and the union.

Originally introduced by Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Senate HELP Subcommittee on Employment and Workplace Safety Chairman Johnny Isakson (R-GA), other original cosponsors of the Protecting Local Business Opportunity Act include Senate Majority Leader Mitch McConnell (R-Ky.), Kelly Ayotte (R-N.H.), John Barrasso (R-Wyo.), Roy Blunt (R-Mo.), John Boozman (R-Ark.), Richard Burr (R-N.C.), Bill Cassidy (R-La.), Thad Cochran (R-Miss.), Susan Collins (R-Maine), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Ted Cruz (R-Texas), Steve Daines (R-Mont.), Mike Enzi (R-Wyo.), Jeff Flake (R-Ariz.), Cory Gardner (R-Colo.), Orrin Hatch (R-Utah), James Inhofe (R-Okla.), Ron Johnson (R-Wis.), Mark Kirk (R-Ill.), James Lankford (R-Okla.), Mike Lee (R-Utah), John McCain (R-Ariz.), Jerry Moran (R-Kan.), Rand Paul (R-Ky.), David Perdue (R-Ga.), Pat Roberts (R-Kan.), Marco Rubio (R-Fla.), Richard Shelby (R-Ala.), Thom Tillis (R-N.C.), David Vitter (R-La.) and Roger Wicker (R-Miss.).

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