ANOTHER MONTH HAS been added to the comment period on proposed changes to the National Labor Relations Board rules for defining joint-employer status. The comment period will now end on Jan. 14.
The NLRB also announced that comments replying to comments made in the initial comment period must be submitted by Jan. 22. The comments can be on any part of the new rule and can be submitted via www.regulations.gov, or by mail or hand-delivery to Roxanne Rothschild, Acting Executive Secretary, National Labor Relations Board, 1015 Half Street S.E., Washington, D.C. 20570-0001.
In September the board announced the rule change after deliberating for more than a year and a half. AAHOA supports the proposed new rule, saying it will protect the franchise industry. It would state that an employer may be found to be a joint employer of another entity’s employees “only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.” Companies with indirect influence and contractual reservations of authority would not be included under the definition.
With the rule, which is subject to revision in response to public comments, the NLRB seeks to avoid forcing companies with no active role in deciding wages, benefits or terms of employment into “collective-bargaining” relationships for another employer’s employees.
“I look forward to receiving the public’s comments and to working with my colleagues to promulgate a final rule that clarifies the joint-employer standard in a way that promotes meaningful collective bargaining and advances the purposes of the act,” NLRB Chairman John Ring said previously.
The definition of joint-employer status has been in limbo since Feb. 26, when the NLRB vacated its 2017 decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. in response to a court finding that one of the board members had a conflict of interest in that case. As a result, the board’s definition on joint employers under the National Labor Relations Act and the Fair Labor Standards Act reverts to the 2015 Browning-Ferris Industries case, which the Hy-Brand decision had overruled.
The current ruling impacts franchisers and their licensees’ business decisions as franchisers would be considered joint employers with franchisees. Opponents of the NLRB ruling say it makes franchisers unfairly liable for workforce issues at franchisees’ businesses and robs owners of the autonomy established in traditional licensing contracts.
However, the new rule is a step away from that concern, AAHOA President and CEO Chip Rogers said in September, calling the Browning-Ferris decision a “disastrous ruling that upended the franchise industry.”
“Ensuring that employers and their employees enjoy a direct relationship without undue interference from third parties who play no role in hiring, scheduling, setting wages or other essential elements of employment is necessary to preserve franchising as a successful pathway to the American Dream,” Rogers said in a statement. “Businesses thrive when there is clarity, consistency and stability. We encourage hoteliers and other small business owners who employ the franchise business model to make their voices heard during the public comment period.”
Rogers said AAHOA will continue to support H.R. 3441, the Save Local Business Act, in the House of Representatives that would codify the joint-employer terms so future administrations cannot change it without Congressional approval. The association also urges the Senate to consider similar legislation. There has been no movement on the bill since November 2017, however.
AAHOA and the American Hotel and Lodging Association are part of the Coalition to Save Local Businesses, which has been advocating for congress to pass the SLBA. The coalition also includes the International Franchise Association, National Restaurant Association and the U.S. Chamber of Commerce.