By Doug Porter
A Reagan-era standard allowing corporations to maintain an arms-length relationship with their workforces fell by the wayside yesterday as the National Labor Relations Board ruled in favor of the Teamsters in a dispute with California recycler Browning-Ferris Industries.
The bottom line here is that big companies may be held responsible for what goes on in the workplace. Organized labor is pleased with the decision. Wall Street isn’t. The actual ruling concerned the use of temporary employees. What people are reacting to are its game changing implications.
There are lots of poorly informed (meaning full of crap) analyses being passed off in various media accounts. To use a baseball analogy, just because a team acquires a high performance player doesn’t mean they’ll have a winning season. Just ask the San Diego Padres.
Blame It on Obama
It’s easy (and all-too-common) to quibble with the specific actions of a particular administration that are displeasing and miss the broader policy actions at play.
The influence of a particular administration over regulatory agencies can have long-term effects. Reagan’s people altered the labor landscape in a way that suppressed wages and increased profits. Now the pendulum is swinging back.
The Browning ruling is the latest in a spate of recent NLRB decisions that have fallen in favor of labor. In 2014, the board made the union election process much speedier(opponents call the new standards the “ambush election” rules) and in a separate case said that employees can organize on workplace email systems. In January 2013, the board ruled that speech on social media is protected speech — in other words, your employer can’t ban you from complaining about your working conditions on Twitter.
These actions have angered the business community, causing some to see the Obama-era NLRB as activist.
However, [Associate professor at Notre Dame Law School and a former NLRB field attorney Barbara] Fick sees a different kind of coherence to these decisions. It’s not so much that they’re pro-labor as that they’re adapting old labor rules to a new world — one in which employees have public conversations about their jobs on Twitter, and also one in which huge corporations increasingly rely on subcontracted or franchise workers. “As industrial relations change, we have to figure out how to apply the old rules to the new situation,” she says.
The Not-So-Fine Print of the NLRB Ruling
It’s important to note yesterday’s decision did not automatically hold corporations responsible for the sins of their subcontractors and franchisees. What we have now is a looser standard, allowing a re-evaluation of those relationships.
Here’s what that loosening means, via Politico
– Direct and immediate no more: The standard no longer requires that one business “directly and immediately” control a workforce nominally employed by another business before it’s named a joint employer. Indirect control will now be sufficient. A building management company, for example, might now face joint employer liability for the janitorial workers in its building, even if those workers are directly controlled by a subcontractor.
– Unexercised control matters: Even if a business has not exerted control over a workforce employed by another business, it might be named a joint employer if it possesses significant potential to do so. That’s huge for fast food franchisors that don’t necessarily dictate how franchisees treat their workers but may reserve some power to do so in franchise agreements.
The makeup of the National Labor Relations Board changes as terms expire and new administrations take office, so there is a potential loophole big enough to drive a truck through.
From the Wall Street Journal:(Emphasis added)
In the past, companies generally had to share decision-making on employment matters such as firing, hiring and discipline in ways the board said would have a meaningful effect on the workers. Under the revised standard, the NLRB also will consider if a business exercises indirect control through an intermediary or has reserved the right to do so. The board will consider this on a case-by-case basis, board officials said Thursday.
The Price of a Big Mac
The NLRB’s decision has been widely interpreted as having the most impact on chain restaurant companies using franchising as a business model. This is most typical in the fast-food industry.
Cue the purveyors of doom and gloom, via the Huffington Post:
The negative reactions from the business community were swift. The National Restaurant Association, a leading lobby for the industry, issued a statement Thursday saying the ruling “is overturning years of established law that has worked to help grow business and feed our economy.” The Competitive Enterprise Institute, a libertarian think tank, said the ruling would have a “devastating economic impact.”
The ruling “is contrary to the realities of the 21st century economy and American free enterprise,” said Rob Green, executive director of the National Council of Chain Restaurants.
Oooooo. “American free enterprise.” That must mean the commies have won… cough, cough.
At some point in the pundit process somebody is going to whine about Browning-Ferris being a small company picked on by the evil Teamsters. At that point in the conversation, I’d advise you to walk away because you’re being lied to.
Browning-Ferris is a wholly-owned subsidiary of Republic Services, a waste management company serving more than 10 million customers in 128 major markets in 40 states and Puerto Rico.
It’s also important to remember most of the corporatocracy complaints are coming from the same people who’ve promised economic benefits to employees by way of trickle down.
Part of a Bigger Picture
As the economy has changed over the past three decades, the rules concerning employee-employer relations have failed to keep up. So-called marketplace economics has contributed significantly to the growth of inequality.
From the Washington Post:
…the panel sided with labor advocates and academics who have described an increasingly “fissured” economy, in which whole industries have been built on business models that offer workers few of the protections of a traditional employer relationship.
“With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances,” the Board said in a release accompanying its decision.
The board’s action is just the latest to tackle the trend. The Department of Labor has cracked down on employer misclassification of independent contractors, and the Occupational Safety and Health Administration has directed inspectors to consider whether principal employers might be at fault for the safety violations of their subcontractors. Courts, meanwhile, have been scrutinizing companies like FedEx and Uber for their use of contractors.
Organized Labor Hails the Decision
…labor groups said the decision is long overdue, and hailed it as an important victory for low-wage workers, including employees at franchise operations such as fast food chains.
“This decision may very well signal the beginning of the end of outdated laws that fail to address an economic structure tilted against working people,” said Richard Trumka, president of the AFL-CIO. “It means more working people can engage in meaningful collective bargaining by bringing all parties who control their wages and other conditions of employment to the table.”
Marc Perrone, president of the United Food and Commercial Workers union, added that corporations have avoided responsibility for the workers they employ for too long. “Today’s decision will help hold bad employers accountable,” he said.
While much of the coverage in the media implies that we can expect to see fast-food workers lining up to join a union in the near future, the reality is vastly different.
Union organizing in industries with transient workers at the bottom of the economic scale is challenging to say the least. Lots of these workers can’t conceive of being able to withhold their labor (strike) because they’re living too close to the edge of homelessness.
Years of propaganda about union “goons”make establishing trust difficult or organizers. And employers have gotten very sophisticated in blocking organizing drives.
So, going back to the baseball metaphor, winning a few games doesn’t equal a championship.
As workplaces have changed, the entities advocating for workers have needed to evolve. It’s no longer a matter of getting pledges signed, sitting down to negotiate contracts and collecting the dues. That’s why you see smart unions talking about bigger quality of life issues, taking on racism and advocating for all workers, dues paying or not.
The Future Appeals Explained
Republicans can be expected to introduce legislation reversing the NLRB’s decision. Right after they repeal Obamacare and investigate Benghazi.
The business lobby Coalition to Save Local Businesses is already calling Democrats looking for supporters to overturn Browning-Ferris. Keep an eye on Congressman Scott Peters, who was endorsed super-early by the Chamber of Commerce yesterday.
You’ll also be hearing lots of talk about appeals and court challenges. For now, they’re mostly hot air. We’re talking many months, if not years.
In the case of Browning-Ferris, the company would first have to refuse to bargain with Teamsters Local 350, the union that brought the case to the NLRB, triggering more litigation.
The NLRB would likely rule for the union if it remained in Democratic control; if it passed into Republican control, all bets would be off. But if the NLRB were to rule for the union, Browning-Ferris could then appeal its decision in federal court.
Both sides in yesterday’s 3-2 party-line decision anticipated the appellate process in their arguments. The majority hewed closely to federal court precedent, frequently citing the Supreme Court and a prior Third Circuit case finding Browning-Ferris a joint employer. The dissenters, meanwhile, said the board had exceeded its statutory authority, a common appellate argument made when trying to reverse an agency decision.
So yes, the decision is a big deal. But, as Yogi Berra once said, “It ain’t over ‘till it’s over.”
Statewide Minimum Wage Boost on Hold
It’s the time of year when potentially contentious legislation gets shelved. A bill by state Sen. Mark Leno increasing the minimum wage to $13 an hour in 2017 is on hold, at least until next year.
Assemblywoman Lorena Gonzalez, who’s been known to take an interest in that sort of thing, said on twitter she’d been assured the bill would be reconsidered come January.
Meanwhile, somebody is out there paying people to collect signatures for an initiative raising the minimum wage to $15 a hour.
The guy in the parking lot at Whole Paycheck (I was just recycling corks, honest!) couldn’t say who he was working for. He pointed to a union “bug” on the printing, saying “its the unions.”
Having seen fake efforts promising to raise the minimum wage (but only for unicorn farmers born in December), I wanted to know more. Things got hostile quickly when he refused to answer. We took pictures of each other.
So, if this guy is legit (There is one proposal out there from the Service Employees International Union-United Healthcare Workers West) maybe somebody ought to let those of us who might support such a notion know. (Pro-tip: Collecting signatures for labor initiatives in front of a union staffed store is usually more lucrative.)
We might even drum up a few signatures.
Failure of the War on Drugs Explained in Two Charts
The Pew Charitable Trust has released an issue brief on federal drug sentencing laws showing that us taxpayers are getting a crappy return on our investment. Why, if I didn’t know better (wink), I’d think there must be some other motive for these policies.
Carly’s Take on the Chamber of Commerce
Maybe all the rubbish about her business experience doesn’t mean much if she doesn’t know the Chamber of Commerce isn’t a government agency.
On This Day: 1917 – Ten suffragists were arrested as they picketed the White House. 1963 – The March on Washington for Jobs and Freedom—the Martin Luther King Jr. “I Have A Dream” speech march—was held in Washington, D.C. 1986 – Tina Turner was awarded a star on the Hollywood Walk Of Fame.
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