Labor board moves anew to limit employer liability

After it was forced to retreat from an effort to make challenging labor practices harder in many workplaces, the National Labor Relations Board is moving to achieve the goal through other means. The board announced last week that it is set to publish a proposed rule redefining a company’s responsibility under labor law for workers engaged at arm’s length, such as those hired by contractors or franchisees.

The proposal would make it less likely that a company in such a situation would be deemed a joint employer liable for labor abuses like firing workers seeking to unionize.

In February, a majority on the board voted to vacate its earlier attempt to change the policy, in a decision involving a company called Hy-Brand, after the agency’s inspector general concluded that one of the board members had a conflict of interest and should have recused himself.

But the board has authority to change policy both by deciding cases and by putting forth rules.

Having been stymied in its initial approach, it has decided to rely on another.

Philip Miscimarra, who was chairman of the board when it issued the Hy-Brand decision, said that rule making is justified and that the task is urgent because the current policy had created uncertainty among employers, workers and unions. “The agency has to fix it,” Miscimarra, who was elevated to chairman by President Trump, said in an interview this year. Miscimarra left the board when his term expired at the end of 2017.

Critics accused the agency of seeking to bring about an essentially illegitimate policy.

“After getting caught violating ethics rules the first time, Republicans on the board are now ignoring these rules and barreling towards reaching the same anti-worker outcome another way,” Sen. Elizabeth Warren, DMass., said in a statement.

Warren and a fellow Democrat, Sen. Patty Murray of Washington, played a crucial role in drawing attention to the conflict of interest that undermined the board’s first attempt to revise its joint employer standard.

Before 2015, the law typically required a company to exert direct and immediate control over workers at a franchise or subcontractor to be considered a joint employer.

But in a ruling that year, when the labor board had a Democratic majority, it altered the standard so that even employers that controlled other companies’ workers indirectly could be considered joint employers.