Landmark Labor Case Potentially Upends Decades Of Employment Standards

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Federal labor officials issued a critical ruling Tuesday against Browning-Ferris Industries that could potentially upend how employment is defined for many businesses.

Browning-Ferris is one of a few companies subjected to a redefined employment rule. The National Labor Relations Board (NLRB) has worked to expand an employment principle known as the joint-employer standard. The potential precedent from the ruling could drastically alter contracting and the franchise model.

“This is a refusal-to-bargain case,” the decision noted. “Following the representation election held on April 25, 2014, the Union was certified on September 14, 2015, as the exclusive collective-bargaining representative of the employees.”

Browning-Ferris will now be considered an additional employer at Leadpoint Business Services. The two companies previously only contracted with one another. The change means Browning-Ferris will now have to accept responsibility for the employees at Leadpoint. Browning-Ferris will also have to negotiate with the Teamsters because the employees at Leadpoint voted to join the union.

“The Respondent has engaged in certain unfair labor practices,” the decision continued. “Specifically, having found that the Respondent has failed and refused to bargain with the Union, we shall order it to bargain on request.”

The National Labor Relations Act dictates that a corporation can be considered an employer over a business it contracts with if it has direct control over employment. Cases involving McDonald’s, CNN and Browning-Ferris have allowed the NLRB to revisit and expand the joint-employer standard.

The expanded standard now considers factors beyond just employment. It makes it easier for the NLRB to declare two or more companies as joint-employers on a seemingly case-by-case basis. Many business models rely on contracting, including franchises, so the move could very well subject countless employers to huge changes.

Businesses have argued the new standard is not well-defined, which has caused uncertainty in their operations. Republican lawmakers and business leaders say that expanding the standard could undermine contracting and the franchise model. The NLRB defended the potential changes by noting corporations oftentimes have too much control over the smaller companies they contract with to be considered their own independent operations.

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