Article

NRF: Labor ruling illustrates skewed objectivity, bureaucratic bumble

The top retail-advocacy group is not mincing its words on how it views a critical national labor board ruling that it claims will hurt job creation in the U.S.

August 28, 2015 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

The National Retail Federation isn’t mincing words regarding the National Labor Relations Board ruling that certain companies can be considered joint employers and is calling the move a “roadblock” for job creation.

The labor board’s 3-2 decision — which ruled a staffing agency can be considered a joint employer — has broad implications across several industries, states the NRF. It will "blur the distinction between independent parties in a wide range of normal business-to-business relationships," such as subcontracting and franchising, according to a National Retail Federation (NRF) statement released Friday.

The ruling "disregards 30 years of clear precedent requiring a joint employer to have direct and immediate control over employees," stated NRF Senior VP for Government Relations David French. French claims the move will be a huge hurdle for small businesses that provide millions of jobs for Americans.

"This is further evidence that the NLRB has given up its position as an objective arbiter of workplace issues and sees itself as an advocate for organized labor as a means of imposing new workplace obligations and legal liabilities on well-known corporations," he said.

In July 2014, the NLRB general counsel’s office ruled McDonalds Corp. could be considered a joint employer along with its local franchise restaurants. The new ruling states Browning-Ferris Industries can be considered a joint employer along with a staffing agency that provided the company employees.

The NRF said it is concerned redefining the concept of joint employers will make large businesses and franchisors responsible for the actions of subcontractors or local franchisees even when they do not exercise direct control over those companies’ employees.

The National Restaurant Association (NRA) also issued a terse statementregarding the decision.

"While we continue to review the NLRB’s ruling, it appears that once again the board is stacking the deck against small businesses," NRA Senior VP of Labor and Workforce Policy and Regulatory Counsel Angelo Amador said in a release.

"The board is overturning years of established law that has worked to help grow business and feed our economy," Amador continued. "The NLRB is already using its new rationale to dismantle the franchisor-franchisee model, which would stifle entrepreneurship and obstruct small businesses’ ability to continue to create jobs in an increasingly challenging economic and regulatory environment.

The decision could make it easier for unions to bargain for higher wages and benefit and negotiate with corporations like McDonald’s and Yum Brands, rather than with individual restaurants, according to aNew York Times report.

A union representing those workers would now be legally entitled to bargain with the joing employer under federal labor law, according to theTimes.

"The decision today could be one of the more significant by the N.L.R.B. in the last 35 years," Marshall Babson, a lawyer who co-authored the brief for the U.S. Chamber of Commerce in the case, told the Times. "Depending on how the board applies its new ‘indirect test,’ it will likely ensnare an ever-widening circle of employers and bargaining relationships," he said.

About Judy Mottl

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Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

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