The National Labor Relations Board late on Thursday reversed an Obama-era decision that had left some employers vulnerable to employee labor complaints, even if they didn’t exercise direct control over employees, media outlets reported.
The NLRB, which is now controlled by a Republican majority, overturned a 2015 decision involving the definition of a so-called “joint employer,” which deemed that hotel chains and franchisers, such at fast food chains and other companies, could have been held accountable in labor disputes involving franchisees, contractors and other companies with which they have a working relationship.
The 3-2 decision by the NLRB reversed the standard it had set in a 2015 case involving Browning-Ferris Industries Inc. It reinstated a previous test that says companies are joint employers only when they exercise direct control over workers.
“Today’s decision restores years of established law and brings back clarity for restaurants and small businesses across the country,” said Cicely Simpson, executive vice president of the National Restaurant Association, in a statement, as reported by The New York Times.
Deborah Cohen is the editor-in-chief of Middle Market Growth.