By Stacy Cowley | New York Times
A National Labor Relations Board ruling that could significantly change the relationship between companies and their subcontractors and between franchise operators and their franchisees has businesses in those industries scrambling to understand the ramifications.
The decision could threaten the business model of staffing agencies and other firms that provide their customers with temporary workers, business groups say.
“This is very disturbing to many of our members,” said Jack Mozloom, a spokesman for the National Federation of Independent Business. “If the ruling stands, it makes it likely that the reason to hire a subcontractor goes away. It takes away the financial advantages, and removes any regulatory or legal protections that a customer gets from hiring them.”
The labor board’s decision — a complex one that is likely to face legal challenges — focused on the relationship between a staffing agency, Leadpoint Business Services, and a customer, Browning-Ferris Industries of California, that hired Leadpoint to provide workers for a recycling facility that it operates. The board decided that Browning-Ferris exerted enough control over Leadpoint’s workers to qualify as a “joint employer,” opening the door for a union seeking to represent Leadpoint’s employees to also negotiate with Browning-Ferris.
