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CDW REPORT: OBAMA NLRB SLASHED OVER 4,500 YEARS OF LEGAL PRECEDENT

By: Ryan Kennedy, Manager, Public Affairs & Grassroots Advocacy

The Coalition for a Democratic Workplace (CDW) released the following statement along with a report on Dec. 6 detailing the massive elimination of legal precedent occurring within the National Labor Relations Board (NLRB) under the Obama Administration:

Today, the nationwide coalition of more than 600 associations, companies, and advocacy organizations released a report thoroughly examining the record of the National Labor Relations Board under President Obama, during which Obama appointees overturned 4,559 years of legal precedent as the Board became a full-time tool of organized labor executives. The report promises to be a useful resource for the incoming administration of President-elect Trump and the 115th Congress.

CDW chair Kristen Swearingen said, “The Obama NLRB quickly moved from groundbreaking to rule-breaking with unwise and sometimes unlawful efforts to turn away from established principles. In fact, as this report lays out, the Obama labor board overturned more than 4,500 years of precedent in just five years.”

Michael Lotito, coauthor of the report and Co-Chair of Littler Mendelson’s Workplace Policy Institute, stated, "Long established precedent forms the bedrock of our legal system. It is time to return to basic principles of decision making which is in the best interest of the Board, those who it serves and our judicial system in general.”

In August 2015 as part of the highly anticipated decision in Browning-Ferris Industries (BFI), the NLRB created a new “joint employer” standard in federal labor law. The question before the NLRB was whether BFI was a joint employer with a staffing services company, Leadpoint, of employees that worked at one of BFI’s facilities. The NLRB said the two companies were joint employers, based on BFI’s “indirect” and “potential” contractual control of the Leadpoint employees.

In establishing this new standard based on indirect control, the Obama administration has directly jeopardized the viability and autonomy of franchise businesses across America. Under the new standard, national brands may be compelled to exercise more control over small businesses with which they contract to limit their liability under the National Labor Relations Act.

Bottom line: the NLRB has made it far more difficult for independent business owners to build sustainable, profitable local businesses, and the new joint employer standard will lead to large corporations dominating Main Street, USA. The joint employer changes threaten the livelihoods of nearly every franchise small business in America.

With President-elect Trump’s victory, many regulations and executive actions may be quickly rolled back by the new Republican administration. However, the August 2015 joint employer standard created by the NLRB and its corresponding harm to thousands of local businesses will not go away until Congress enacts a permanent legislative solution. The Trump Administration cannot change the NLRB’s composition upon arrival. The NLRB is an independent federal agency featuring staggered terms for its members and general counsel. Most importantly, NLRB General Counsel Richard Griffin will continue to set the Board’s agenda through 2017.

While the President-elect will have the chance to appoint two new Board members early in his new administration, it may be weeks or months until he offers nominations, potentially months after that until the Senate can approve the members, and possibly another year or more until the new precedent can be reversed through an NLRB case decision.

The joint report published by CDW and Littler's Workplace Policy Institute supports and highlights the need for a legislative fix in Congress to reverse the new joint employer ruling and return to the previous standard. With a new administration incoming, the time is now to make your voice heard and urge your members of Congress to act on joint employer!

View the report published by CDW and Littler’s Workplace Policy Institute in its entirety here.

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