Pending labor ruling could redefine everything; make business owners ‘glorified managers’

The National Labor Relations Board is once again taking aim at small business owners at the request of labor unions.

Businesses are bracing for a labor ruling that could essentially redefine what constitutes an “employer,” exposing entire industries to a slew of new liabilities and regulations.

The NLRB is expected to rule by the end of August on a case brought by the Teamsters that Browning-Ferris Industries – a Houston-based waste disposal company – is legally responsible, and considered a “joint employer,” to workers provided by a temporary staffing agency.

The California branch of the International Brotherhood of Teamsters says changes are needed to protect workers employed by temporary staffing agencies, but industry experts say any ruling could have significant consequences in other industries as well, according to The Hill.

Union FranchiseEssentially, the ruling could make a business that uses staff from other companies legally responsible for the employees, as if it had hired them directly.

But the decision could have much broader consequences according to business insiders, possibly even jeopardizing the way franchises – such as McDonalds or Burger King – conduct business.

“It has the potential to change the entire way businesses operate in this country,” said Rob Green, executive director of the National Council of Chain Restaurants, adding that it would turn the franchise industry “on its head.”

Franchise owners could quickly find themselves demoted from “being their own boss to being a glorified manager,” according to the senior vice president of the National Restaurant Association, Angelo Amador.

If the NLRB rules in favor of the Teamsters, corporations would likely have to take over the operational aspect of owning a franchise, leaving small business owners powerless to set wages, hire new employees, and even set hours.

The liability placed on “joint employers” by the new definition of “employee” would also leave small business owners guessing at who’s in charge of setting employee policy when using staff from outside contractors.

Businesses that currently utilize temporary workers from staffing agencies would also be forced to change their business practices, potentially putting staffing agencies out of business as corporations move temporary work “in-house” to avoid cumbersome regulations.

Temporary workers, franchise owners, and small businesses who depend on outside help all face the prospect of new liabilities, challenges, and uncertainty because the Teamsters decided a waste-disposal company should be considered a “joint employer” for workers hired by a separate company.

The union bosses should probably be reminded that without successful employers, they wouldn’t have many due-paying workers to represent in the first place.

Michael Schaus

Michael Schaus

Michael Schaus is a talk radio host, political humorist, and columnist. Having worked in a wide range of industries (including construction, journalism, and financial services) his perspectives and world views are forged with a deep understanding of what it means to be an American entrepreneur.
Michael Schaus

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