Republicans’ Joint-Employer Legislation Scored by Labor Law Experts as “Harmful”

Democrats promise fight to block legislation that would undermine workers’ rights under the National Labor Relations Act  

WASHINGTON – Today, the HELP Subcommittee held a legislative hearing on H.R. 3459, the Protecting Local Business Opportunity Act—a bill that would overturn the recent National Labor Relation Board (NLRB) decision regarding the definition of a “joint-employer”. Democratic Members of the HELP Subcommittee and witnesses with expertise in labor law pointed out that the misnamed bill would undermine collective bargaining protections under the NLRA. 

 

For employees working for leasing companies and subcontractors, H.R. 3459 would make it impossible for these individuals to bring to the bargaining table those employers who directly or indirectly have a say in the essential terms and conditions of their employment. Under the National Labor Relations Act (NLRA), two statutory employers may be joint-employers of a certain group of employees if they share or co-determine matters governing the essential terms and conditions of employment. In August 2015, the NLRB reversed a series of Reagan- and Bush-era decisions that narrowed the definition of a “joint-employer” for purposes of collective bargaining in a case known as Browning Ferris Industries of California (BFI). This decision—which reinstated the NLRB’s traditional test that had been in place prior to 1984—defined a joint-employer as a person who “controls or has the right to control” the essential terms and conditions of employment. The NLRB based its decision on the common law principles of agency.

 

“If H.R. 3459 were to pass, many workers would not be able to negotiate with the employers who actually control the terms and conditions of their employment,” said Ranking Member Bobby Scott (VA-03). “Instead of weakening the ability of workers to bargaining for a better life, we should be rebuilding the middle class by raising the minimum wage, providing women with equal pay for equal work, strengthening the NLRA through the WAGE Act, and providing workers with paid sick leave.” 

 

Two law professors, Michael Harper, Professor of Labor Law at Boston University School of Law and Ann Lofaso, Professor of Law from West Virginia College of Law, challenged the premise that the BFI decision would undermine the franchising model and could destroy thousands of businesses. 

 

 “The BFI decision is a narrow and limited decision because it is tethered to judicial and Board precedents that existed for several decades prior to the mid-1980s,” said Professor Michael Harper of Boston University Law School. “Its significance “has been greatly exaggerated,” he added. “This exaggeration derived initially from the BFI dissenters, whose opinion reads like a speculative law review article written by a professor with unrealistic hypotheticals and a policy agenda, rather than a responsible attempt to contribute to the articulation of workable legal principles. The exaggeration was then compounded in the press, which of course always wants to tell us that revolutionary changes occurred in the prior day that we must read about today, and then by lobbyists, who claim that the sky is falling and that their fees must be paid to help keep it in place above our heads.”

 

“The proposed legislation does grave harm to – dare I say, kills the American dream of – the millions of employees by rendering bargaining futile in cases where a joint employer retains control, but which control is not “immediate” or ‘direct,’ stated Professor Ann Lofaso of the College of Law at West Virginia University. 

 

Ranking Member of the HELP Subcommittee, Jared Polis (CO-02), emphasized the importance of restoring the equality of bargaining power between employers and employees.

 

“Instead of focusing on improving the economy, revitalizing the middle class, and decreasing income disparity, this committee is taking up yet another bill that chips away at the ability of workers to collectively bargain for a fair share of the fruits of their labor,” said Rep. Jared Polis (D-CO), Ranking Member of the HELP Subcommittee. “This legislation will set up a shell game loophole for employers to avoid accountability, which will harm workers and small businesses. I hope at the next committee hearing we can begin addressing the needs of American workers, instead of taking up another ideological attack on unions and the NLRB.”

 

Testimony of Michael Harper, a Professor of Labor Law at Boston University School of Law, can be found here.

 

Testimony of Ann Lofaso, a Professor of Law from West Virginia College of Law, can be found here. 

 

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