Should a company be liable for negotiating a collective bargaining agreement alongside one of its contractors or franchisees even if it doesn’t set any workplace rules? U.S. District Judge Gregory Woods of the Southern District of New York thinks it should. On September 8, Judge Woods struck down a key portion of a rule change finalized in January by the Department of Labor that narrowed the circumstances for assigning an employer ‘joint’ or ‘dual’ status and thus forcing it to collectively bargain. The DOL rule, he concluded, contravened the Fair Labor Standards Act, and was “arbitrary and capricious.” Attorneys general in 17 states and the District of Columbia had filed suit in late February to enjoin enforcement. As a result of the decision, unions have a far wider basis for suing an employer for unfair labor practices.
Should a corporation be forced to negotiate alongside contractors or franchisees even if it doesn’t set their workplace standards? Once again, the National Labor Relations Board is attempting to clarify this contentious issue. On September 14, the NLRB issued a Notice of Proposed Rulemaking that would assign a company ‘joint’ or ‘dual’ employer status along with its affiliate “only if the two employers share or codetermine the employee’s essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.” In effect, the board wants to restore a longstanding, and more realistic, definition that predated its Obama-era ruling in Browning-Ferris. Unions, by contrast, want to retain the widened definition to expand the possibilities for corporate liability for unfair labor practices.