WASHINGTON, DC – U.S. Senator Pat Roberts (R-Kan.) today cosponsored legislation that would reverse the National Labor Relations Board (NLRB)’s recent decision to redefine a joint-employer relationship, a ruling that effectively reduces any incentive for a corporation to sell franchises or subcontract businesses.

“The NLRB’s recent decision will destroy franchises and small business opportunities, hurt current small business owners, and reduce any incentive for a corporation to operate or sell franchises,” said Roberts. “The so-called nonpartisan NLRB is just another arm of the Obama agenda seeking to hurt businesses with an increasing onslaught of regulations in the name of worker protection.”

Last month, the partisan NLRB reversed a nearly 40-year position that one business cannot be held liable for the employment-related matters of another business unless that first business had “direct and immediate” control over the employees in questions. The new ruling states that “indirect control” or “unexercised potential” to control working conditions will now make two separate employers joint employers. This new standard will be applied retroactively. 

Under the new standard, multiple employers will have to jointly negotiate working conditions with unions and share liability for labor law violations. As a result, larger business will exert greater control over the smaller employer who actually owns and operates the business. Additionally, fewer employers will parcel out business to local subcontractors, suppliers or subsidiaries, for fear that they will now be liable for the subcontractor’s employment decisions. Millions of employees will also lose the ability to negotiate things like pay, hours and leave time with their direct supervisor, because those decisions will now be made between the larger employer and the union.

The Protecting Local Business Opportunity Act would roll back the NLRB ruling and reaffirm an employer must have “actual, direct and immediate” control over an employee to be considered a joint employer.

In the Senate, the legislation was introduced by Sens. Lamar Alexander (R-Tenn.) and Johnny Isakson (R-Ga.). In addition to Roberts, it is cosponsored by Senate Majority Leader Mitch McConnell (R-Ky.), Kelly Ayotte (R-N.H.), John Barrasso (R-Wyo.), Roy Blunt (R-Mo.), John Boozman (R-Ark.), Richard Burr (R-N.C.),  Bill Cassidy (R-La.), Thad Cochran (R-Miss.), Susan Collins (R-Maine), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Ted Cruz (R-Texas), Steve Daines (R-Mont.), Mike Enzi (R-Wyo.), Jeff Flake (R-Ariz.), Cory Gardner (R-Colo.), Orrin Hatch (R-Utah), James Inhofe (R-Okla.), Ron Johnson (R-Wis.), Mark Kirk (R-Ill.), James Lankford (R-Okla.), Mike Lee (R-Utah), John McCain (R-Ariz.), Jerry Moran (R-Kan.), Rand Paul (R-Ky.), David Perdue (R-Ga.), Mike Rounds (R-S.D.), Marco Rubio (R-Fla.), Richard Shelby (R-Ala.), Thom Tillis (R-N.C.), David Vitter (R-La.) and Roger Wicker (R-Miss.).

Senator Roberts is a member of the Senate Committee on Health, Education, Labor, and Pensions.

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