Small Businesses Would Be Unfairly Held Liable For Unlawful Labor Practices, NFIB Says
Last August, the National Labor Relations Board issued a 3-2 decision in a case involving Browning-Ferris Industries of California. The case drew widespread criticism from groups including the NFIB, as it marked an aggressive expansion of the NLRB’s definition of a “joint-employer”, upending decades of labor law precedent in a way that would be detrimental to businesses. According to Global Trade, the NLRB’s decision to expand this definition means businesses that “use facilities staffed by third-party agencies” may find themselves being “held liable for employee actions and be brought to the bargaining table as joint employers to negotiate union contracts.” The NFIB has filed a brief before the DC Court of Appeals in the Browning-Ferris v. NLRB case, arguing that the NLRB rule “would make small businesses liable for unlawful labor practices committed by entities completely outside of their control.” NFIB Small Business Legal Center Executive Director Karen Harned explained that prior labor law meant that “owners were only liable for an employee’s action if they had a direct involvement in essential employment matters, which seems fair.” However, “the NLRB’s new standard completely muddles the definition of an employer and creates a huge wave of uncertainty. This is a major concern for small, independent businesses because it will create a severe disincentive to contract with smaller firms. No rational business owner is going to risk a hefty lawsuit for employees that they have not hired.”
What This Means For Small Businesses
Small business owners face difficulty growing their businesses in an environment that fosters uncertainty. According to Harned, the NLRB ruling, if kept intact, would mean that “every business owner will be forced to reevaluate his or her contractual relationships and that could be devastating for franchises and subcontractors.”
Workforce Management also reported on problematic aspects of the NLRB’s decision.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.