Report: NLRB Ruling Could Impact Small Businesses, Franchises

Sept. 1, 2015

Sept. 1, 2015—The National Labor Relations Board (NLRB) issued a ruling on joint ownership that will impact small businesses, according to a report by Jeremy Quittner of Inc. magazine.

The ruling, which involved a staffing agency that provided workers for a California recycling centers, redefines what it means to be a joint owner. The ruling affects anyone who uses contract labor in daily operations, as well as anyone involved in franchise operations.

Anyone who is a franchise operator will now be held accountable for any labor disputes happening at the local level of your franchisee’s operations.

The NLRB said a key factor in the ruling was the fact that some 3 million laborers are currently temporary laborers with none of the rights that full-time employees have, according to Quittner.

This ruling, although likely to be disputed in court, could still have a major impact on your business. To be prepared, Quittner advises you to review your contracts and make sure that there is nothing in them that appears to give you direct control of workers. Make sure that, moving forward, all contracts are written in a way that gives the contracting agency full authority over workers, and carefully evaluate any contract agency you plan on working with.

Be sure not to terminate any existing relationships with contracting agencies whose workers are in the process of organizing, which may be illegal in the eyes of the NLRB. It may also be a good idea to work with something called a professional employer organization (PEO), which are hybrids of staffing first and third-party human resources firms that take on certain task.

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