NLRB’s New Joint Employer Standard Threatens Business Formation and Job Creation

In August 2015, the National Labor Relations Board (NLRB) unilaterally changed the definition of joint employment in a way that could expose tens of thousands of businesses across the United States to increased costs and liability. The NLRB’s action will block a path toward entrepreneurship, reduce job creation, expand employer liability, increase employment insurance costs, lead to a surge in lawsuits, and disrupt thriving business models. The underlying motive of the NLRB’s move is to ease union organizing. The expanded joint employer standard eases union organizing drives and entrenches unions in a workplace.

A bill now making its way through Congress would restore the traditional joint employer standard, which fostered the creation of thousands of business relationships that have served entrepreneurs, workers, and consumers for decades. The Protecting Local Business Opportunity Act (H.R. 3459) has already passed the House Education and the Workforce Committee, and has been referred to the floor of the House of Representatives. The bill would return stability and certainty to thousands of business relationships across the country, and alleviate entrepreneurs’ concern about losing the workplace flexibility and autonomy that made them want to start a business in the first place.

Congress created the National Labor Relations Board to act as a neutral arbiter in labor disputes in a way that represents the public interest. However, in the years since its creation in the 1930s, the Board has become highly politicized. With members are appointed by the President, NLRB case precedent regularly flip-flops depending on which party controls the White House. That has created great uncertainty in federal labor policy for decades. Congress should pass a bill similar to the National Labor Relations Reorganization Act (NLRRA) of 2011 that abolishes the highly politicized Board.

Click here to read the full publication →