Feds Look To Declares War On Temp Agencies

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Members of the general public have until Aug. 5 to submit legal briefs in a federal labor case that could fundamentally change how temp agencies operate.

Many people and businesses rely on temp agencies. They connect those looking for part time work with companies looking for temporary workers. Now cases involving Oakwood Care Center and M.B. Sturgis have allowed the National Labor Relations Board (NLRB) to revisit how the joint-employer standard should apply to temp agencies.

“The Board invites the filing of briefs by the parties and interested amici addressing issues raised in this case,” the NLRB call for legal briefs stated. “Should the Board continue to adhere to the holding of Oakwood Care Center, which disallows inclusion of solely employed employees and jointly employed employees in the same unit absent the consent of the employers?”

The call for legal briefs was first issued on May 18. The purpose is to get opinions and legal perspective from those interested parties outside the case. It also shows the NLRB is interested in revisiting established rules.

“If the Board decides not to adhere to Oakwood Care Center,” the NLRB continued. “Should the Board return to the holding of Sturgis, which permits units including both solely employed employees and jointly employed employees without the consent of the employers?”

The joint-employer standard has been around for decades. It normally helps to establish which company has responsibility over employees when multiple companies contract with one another. If one company is found to assert enough control over the employees of a company with which it holds a contract, the two companies will both be considered employers over the employees.

The NLRB has been trying to expand upon the standard. Critics like the International Franchise Association have argued the rule change is an attempt to benefit unions. This is because it’s much easier to unionize one large joint-employer as opposed to many separate employers that just so happen to contract with one another.

“For manufacturers, this case is yet another example of the NLRB changing well-established and functioning labor laws,” Amanda Wood, director of human resources for the National Association of Manufacturers, told the Washington Examiner. “Without a justifiable and sufficient change in circumstance and in how the business community operates.”

Before revisiting how the standard should apply to temp agencies, the NLRB looked at franchising, a unique form of contracting. Franchising allows a small business to contract with a large corporation so that it can to use its brand name and sell its products. Though the small company has to accept its own risk, it does so while having the backing of a well-known brand and products.

The problem is when a corporate brand name gets declared a joint-employer with a small business, it must accept responsibility for the actions of that operation, impinging on the small business owner’s freedom to make business-related decisions. Business groups argue the change will likely result in corporations being less likely to participate in the franchise model, or in them asserting more control over the small businesses they’ve franchised.

Since announcing its interest in revisiting the standard last year, Republican lawmakers and business leaders became immediately concerned. The NLRB has defended the potential changes. It argued in the McDonald’s case that franchisors often times have so much control over the independent franchisees, that it’s difficult to consider them a “small business.”

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