NLRB, Browning-Ferris Industries, SACS Consulting & Investigative Services, Inc., Timothy Dimoff

Tim’s Take on the NLRB Ruling

How Will This Ruling Affect Your Business?

Last year, the National Labor Relations Board (NLRB) ruled that Browning-Ferris Industries, a Houston-based waste-disposal company, is a joint employer of workers provided to the firm by a temporary staffing agency. As a result of this ruling, the company could be forced to collectively bargain with those employees and could be held liable for any labor violations committed against them. This decision has the potential to affect businesses in multiple industries, as it determines whether or not independent contractors  have the right to bargain with an employer that has authority to control employees’ pay, benefits, working conditions and workplace policies.  

Unions exist because employees want to bargain as a group with their employers over improvements in the workplace, salary increases and/or benefits. If employers are able to manipulate the system and avoid bargaining, for example, by hiring temporary employees or subcontractors, this undermines regular employees the ability to organize and bargain.

According to Tim Dimoff of SACS Consulting and Investigative Services, “This ruling will have broad repercussions for the business world, not just franchise companies, but any company that sub-contracts or enhances another company. All companies already have federal and state legal obligations to report and take action on for any type of unacceptable behavior taking place under their roof, including such things as sexual harassment, discrimination and abuse. This ruling is nothing less than opening the process to become more complicated and allow legal access to more ‘pocket books’ that will result in more litigation, false claims and unwarranted settlements.”

However, backers say it is a necessary step to protect a vulnerable class of temporary workers and independent contractors. But business groups fear the decision will wreak havoc throughout the private sector.

Dimoff says, “It is believed that this new ruling will help vulnerable workers challenge unresponsive employers. That protection already exists for the vulnerable worker to bring forth any mistreatment to their DIRECT employer, and now we want to engage another employer who is NOT the legal employer. Lastly, if any other employer has an employee or manager that is causing, allowing or participating in improper or illegal action towards any employee of another company, by law that other employer is already sharing in the legal responsibility for that improper action. To blindly include legal responsibility to all employers in a sub-contract or franchise situation is presenting and opening a large can of worms with only substantial negative consequences!”

So how will this ruling affect your business?

Restaurants could suffer the biggest hit from the ruling. Franchise owners who want to open local branches of restaurants, like McDonald’s or Burger King, could go from being their own boss, to becoming a glorified manager. Currently, corporations take care of marketing, but leave decisions about wages, hours and hiring to the local franchise owners. However, the new ruling could flip this practice, making corporations responsible for labor violations committed by franchise owners.

Other companies with subcontractors or independent contractors that will be affected by this ruling include:

  • janitorial workers
  • delivery truck drivers
  • construction workers
  • warehouse employees
  • institutional food service workers and
  • home healthcare agency staffers.

What are your plans? Do you see this impacting your business?

About SACS Consulting & Investigative Services, Inc.

If your business falls into one of these industries, contact President Tim Dimoff at (330) 255-1101 for a free consultation about ways SACS Consulting can update your Human Resources policies and procedures.

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