Deregulation Under the New NLRB

Date: January 08, 2018

The National Labor Relations Board (NLRB) took several very important deregulatory actions in December 2017 that are welcome news to the small business community.

Traditional Common-Sense Definition of Joint-Employer Re-established: NLRB returned to decades-old precedent concerning who is and who is not a joint-employer. As you may recall, the NLRB under President Obama greatly expanded the definition of what businesses jointly employ and are jointly liable for their employees. Obama’s NLRB said that even if a business had indirect control over an employee, they would be considered an employer for purposes of union organizing. As a result, many small businesses that subcontract with larger corporations were threatened with losing a lot of business because of the increased liability the Obama-era policy created. In December, the NLRB went back to previous precedent. Now, only those businesses that directly control an employee (hire, fire, etc.) are considered the business for whom the employee works.

Elimination of Micro-Unions: The Board also ruled that a group of 100 welders and “rework specialists” could not form their own union at a company. Rather a majority of the company’s 2500 employees would have to decide to form a union. The Obama NLRB’s position allowed subgroups of employees in a business to form micro-unions and overly complicated the ability of a business owner to manage employees consistently across an organization.

Employee Handbooks: Over the years, business owners had legitimate reasons for creating employee policies relating to social media, confidentiality, and civility in the workplace. However, over the last several years, the NLRB often ruled such policies a violation of employees’ rights under the National Labor Relations Act. Before Christmas, the NLRB returned to a more flexible test for what can and cannot be in an employee handbook so that policies like the ones mentioned here can be reinstated.

The NFIB Small Business Legal Center welcomes these changes that we had been fighting for over the last several years.

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