Last week, the Republican-led House Committee on Education and the Workforce held a hearing on H.R. 3441, the so-called Save Local Business Act -- a bill that has almost nothing to do with saving small and local businesses. According to its sponsors, the legislation was introduced to overturn the National Labor Relations Board’s (NLRB’s) 2015 decision in Browning Ferris Industries.
In that decision the NLRB ruled that Browning Ferris, a waste management company, was a joint employer along with a staffing agency called Leadpoint. At the time, Leadpoint provided 80 percent of the workforce for Browning Ferris’ recycling facility.
The NLRB’s decision was hardly remarkable: Browning Ferris had significant control over key features of the employee’s work. The company controlled workers’ hours, their pay, and even dictated the speed of the recycling line. If the sorters and screeners who had petitioned for a union were to have any power to negotiate over their wages and working conditions, they needed Browning Ferris at the bargaining table.
The Browning Ferris decision provoked howls of outrage from the business community and their Republicans advocates in Congress. Their claim is that the decision threatens the franchise business model and muddies the legal waters for all employers – even though the NLRB made clear in its decision that Browning Ferris is NOT a franchise case.
Now Republicans in Congress, urged on by wealthy corporate lobbyists, have introduced H.R. 3441. They say it is intended to overturn Browning Ferris. The bill would certainly do that, but it would do much, much more. In fact, as a practical matter the legislation would eliminate joint employment under the National Labor Relations Act and the Fair Labor Standards Act. This would make it easier for employers to cheat workers out of their wages and limit workers’ freedom to organize and negotiate for better pay and working conditions. It is radical, far-reaching legislation that would roll back worker protections. The bill establishes a whole new definition of “joint employer” that is far narrower than agencies, courts and the common law have ever used. It would reverse decades of precedent and weaken worker protections established by Congress in the 1930s under the Fair Labor Standards Act and the National Labor Relations Act.
Specifically, the bill overreaches by applying the new joint-employer definition to the Fair Labor Standards Act – an entirely different law that was NOT at issue in the Browning Ferris case. More than just reversing Browning Ferris and amending labor law, the legislation leaves workers vulnerable to not being paid for hours worked when their employers use unscrupulous subcontractors.
The new definition is so restrictive that, as a practical matter, no business will meet the definition of joint employer ever. To be a joint employer under the bill, an employer must exercise direct, actual, and immediate control over all of the worker’s conditions of employment – their pay, their safety, their hours, etc.
All an employer would have to do to get out from under joint responsibility for the workers is relinquish control over one of these things. For instance, a company could delegate responsibility for workplace safety to the subcontractor, while still retaining control over pay and hours. This invites companies to manipulate the system to the detriment of workers.
Joint employment cases are relatively rare, and they are extremely fact intensive. But in the right circumstances – like the Browning Ferris case – it’s essential that workers be able to seek recourse from, or negotiate with, more than one employer. Subcontracting and temporary employment has become an all too common trend in today’s workplace. Now more than ever the rights and freedoms of workers should be protected – not obliterated like Republicans propose to do under H.R. 3441.
Lynn Rhinehart is the AFL-CIO’s general counsel.