Republicans Renew Inquiry Into Multi-Agency Attack On Businesses

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Congressional Republicans renewed their inquiry Tuesday into an alleged multiple-agency secret attack against businesses after receiving information that conflicts with what agency officials have said.

Republicans have been concerned federal agencies are secretly working together to drastically change employment law. The National Labor Relations Board (NLRB) has worked to expand a critical business contracting rule known as the joint-employer standard. The Department of Labor (DOL) has denied coordinating with them on the matter. The House Committee on Education and the Workforce, however, received documents Jan. 13 which conflict with those earlier claims.

“This information clearly demonstrates the Department and the NLRB communicated directly on the joint employer policies,” the committee noted in a letter to Labor Secretary Thomas Perez. “This new information – and the Department’s unwillingness over a period of months to fully cooperate with the Committee’s request – calls into question the Department’s respect from Congress’s constitutional oversight authority.”

The committee is now renewing its Oct. 13 request for all related documents, communications, and information between the agencies. The joint-employer standard can be applied to many different business models including franchising. Franchises often consist of a corporation which contracts its brand name and products out to smaller businesses. The standard allows the federal government to declare multiple companies that contract with one another a single employer if one has direct control over the employees of the other.

The expanded standard could very well unravel many different types of business models. When one company gets declared a joint-employer with another, it must accept responsibility for the actions of that operation. Business groups argue this could result in corporations being less likely to participate in the franchise model or asserting more control over the small businesses they contract with.

The joint-employer standard has traditionally been considered based on direct and immediate control. The control could be over wages, benefits and other employment factors. Cases involving McDonald’s, CNN and Browning-Ferris have allowed the NLRB to revisit and expand the standard.

The expanded standard now considers factors beyond just employment. It makes it easier for the NLRB to declare two or more companies joint-employers on a seemingly case-by-case basis. The standard is pivotal to franchising and contracting and may very well subject countless employers to huge changes.

Information leaked last year prompted concern among lawmakers that the NLRB has been secretly working with the Occupational Safety and Health Administration (OSHA) in its efforts. The issue was first raised Sept. 23 during a Senate hearing. OSHA falls under the DOL.

Businesses have noted the new standard is not well-defined, which has caused uncertainty in their operations. The NLRB has defended the potential changes by noting corporations oftentimes have too much control over the smaller companies they contract with for them to be considered their own independent operations.

Critics claim the change to the joint-employer rule is nothing more than an attempt to benefit unions. Under the previous standard, unions would have to organize employees at each individual company within a single franchise as opposed to organizing all employees at once within the same franchise. The NLRB has been accused on multiple occasions of unfairly benefiting labor unions.

The DOL, NLRB and OSHA did not respond to requests for comment by The Daily Caller News Foundation.

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