NLRB Developments

GOP in Congress Moves to Roll Back Recent NLRB Joint-Employer Standard Decision

Oct 2, 2015

With few legislative days remaining in the first session of the 114th Congress, lawmakers are actively pursuing legislation to address recent regulatory and executive actions undertaken by President Barack Obama in the labor and employment area.

Sen. Lamar Alexander (R-Tenn.) and Congressman John Kline (R-Minn.), the respective chairmen of the Senate and House committees with jurisdiction over labor matters, recently introduced legislation (S. 2015, H.R. 3459) to roll back the National Labor Relations Board’s (NLRB’s) Browning-Ferris decision. The legislation, strongly supported by SHRM, reaffirms the previous “joint employer” standard—well recognized by employers and employees for over 30 years—which states that an employer must have “actual, direct, and immediate” control over an employee to be considered a joint employer.

The recent NLRB decision held that merely “indirect control” or even “unexercised potential” to control working conditions will now make two separate employers joint employers. The ramifications of this decision for HR practitioners are huge. If the ruling is allowed to stand, in many situations multiple employers will have to jointly negotiate working conditions and would be held liable under the National Labor Relations Act for any labor law violations. Any employer who contracts out services or is a franchisee will be greatly impacted by this ruling.

SHRM will actively work with policymakers in both the Senate and House to try and advance the legislation in the coming months.

Also worth noting, Sen. Kelly Ayotte (R-N.H.) recently introduced legislation (S. 2070) as an alternative to the SHRM-opposed Paycheck Fairness Act, which limits the factors that HR professionals can use when determining compensation. The bill, known as the Gender Advancement in Pay Actand modeled after New Hampshire’s pay equity law, prohibits retaliation against employees who discuss their pay and creates civil penalties for employers who willfully engage in gender-based pay discrimination in the workplace. Consideration of this legislation by the full Senate is unlikely this year, but the legislation could see action in 2016.

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