Labor Unions and the Joint Employer Rule

Two significant rulings by the National Labor Relations Board in 2015 expanded the longstanding interpretation of “joint employment,” a designation given when two firms are involved in directing, controlling, training and supervising an employee. The NLRB is a politically appointed board that governs employer relations with labor unions, but its new interpretation of joint employment will have the greatest effect on small businesses. The impetus for the rule is the desire to ease unionization of small businesses that are franchisees of corporations, such as restaurant and retail food chains. The franchise sector generates more than $2 trillion in economic activity and employs 20 million people. It would be a mistake to hamstring it with the costs and responsibilities of a poorly interpreted and overreaching rule that would provide no economic benefit to such a significant industry.

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