Regulatory Reform Likely Under New Labor Board

Date: August 14, 2017

Two new nominations to the National Labor Relations Board indicate that a reversal of Obama-era labor regulations is now within reach.

President Donald Trump’s nominations for the National Labor Relations Board, Marvin Kaplan and William Emanuel, are predicted to usher in a new decision-making environment that prioritizes overhauling labor regulations from the Obama administration. Last week, the Senate approved Kaplan’s appointment to the board, and Emanuel’s nomination is expected to be evaluated after the August recess, according to Bloomberg.

With both Kaplan and Emanuel on the board, the NLRB’s majority is expected to work towards reversing several labor regulations from the previous administration. Considering burdensome rulings like the joint employer standard, new NLRB leadership has the potential to save small businesses from future regulatory headaches.

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Under the Obama administration, the NLRB revised the joint employer standard and, in doing so, disincentivized larger businesses from franchising or hiring subcontractors. Under the so-called joint employer guidance, businesses could be sued for workplace violations committed by other companies with which they have a contractual relationship. Franchisees, who are typically small business owners, and subcontractors are most at risk. 

“Under joint employer, a building management company can be sued for labor violations committed by the office cleaning subcontractor,” said Brad Close, NFIB’s Senior Vice President of Public Policy and Advocacy. “It’s a way for trial lawyers to target companies with deeper pockets, and it’s a way to discourage larger small businesses from having legal relationships with smaller firms that are more difficult to unionize. That’s a direct threat to small businesses.”

Many within the business community are hopeful that the NLRB, with Kaplan and Emanuel, would re-evaluate and overturn the ruling that revised the joint employer liability. Another regulation expected to be revisited is a workplace unionizing rule that permits “micro-units” of employees to negotiate with their employer.

Under past administrations, the NLRB pushed regulations without careful consideration of the impact on small business owners and job creators. Kaplan and Emanuel have the opportunity to give the NLRB a new perspective, one that puts small business first. 

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Related Content: Analysis | Labor | Legal | National | Regulations

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