Court Axes Obama’s Pro-Union ‘Joint Employer’ Rule dailycaller.com/2018/12/29/cou…
A federal appeals court ruled Friday that an Obama-era labor law that made businesses responsible for labor violations committed by contractors was too broad, Reuters reports.
The National Labor Relations Board (NLRB) ruled in 2015 that companies and franchisers with “indirect and direct control” of employees could be held liable for labor violations committed by contractors or franchisees.
The D.C. Circuit Court of Appeals ruled 2-1 that the board did not sufficiently define “indirect” control and sent the 2015 decision back to the board for a more restricted explanation.
The 2015 NLRB ruling overturned more than two decades of precedent while placing businesses at increased risk of violating labor laws. The ruling also empowered unions to negotiate directly with a franchise’s corporate headquarters if franchise employees sought to unionize.
The Obama-era NLRB’s decision threatened to topple the current franchise business model as franchisers that tried to navigate or avoid the additional liability the law forced them to take on. Most franchisers began pulling back support for franchise businesses.
Prior to the ruling, franchisers offered advice/counseling to franchisees on topics such as running a business and employee relations. After the 2015 ruling, many franchisers began pulling back support and guidance to avoid being classified as an employer w/ “indirect control.”
