In what is being described as “one of the biggest labor decisions of the Obama administration,” the National Labor Relations Board (NLRB) on Thursday expanded its “joint-employer” standard, paving the way for unions to organize on a much broader scale—and striking fear into the hearts of corporations that have used previous labor laws to shift workplace responsibilities elsewhere.
While the ruling dealt specifically with a California waste-management company, observers said its implications could go much further. “McDonald’s, Burger King and every other company that relies on a franchise business model just suffered the legal setback they’ve been fearing for years,” wrote Huffington Post labor reporter Dave Jamieson on Thursday afternoon.
In its 3-2 ruling, the NLRB held that Browning-Ferris Industries of California was a joint employer of workers hired by a contractor, Leadpoint Business Services, to help staff the company’s recycling center.
As the New York Times explains:
The ruling, which may eventually be challenged in court in a variety of individual disputes, changes the definition of a crucial employer-employee relationship that had held in some form since the 1980s. Now, a company that hires a contractor to staff its facilities may be considered a so-called joint employer of the workers at that facility, even if it does not actively supervise them.
A union representing those workers would now be legally entitled to bargain with the upstream company, not just the contractor, under federal labor law.
The Hill notes that the ruling “is a sharp departure from previous labor laws that help companies be responsible only for employees over whom they have direct control by setting their hours, wages, or job responsibilities. They could get around the requirement by hiring staffing agencies and subcontractors that deal more closely with the workers.”