In this week’s roundup, we look at congressional action related to the joint-employer standard, including a push by Senate Democrats to amend the National Labor Relations Act and a new funding bill with a joint employer-related rider. Plus, we discuss a Financial Services Committee hearing featuring comments from SEC Chairman Jay Clayton.
Congress Takes Competing Actions on Joint-Employer Standard
Despite the National Labor Relations Board’s announcement that it will initiate a rulemaking to clarify the joint-employer standard this summer, Congress is not sitting by idly waiting for new NLRB regulations. There is an attempt in the House to use the appropriations process to limit the impact of the current broad joint-employer standard, while Senate Democrats are seeking to codify the broad standard (which would undercut the NLRB’s authority to issue new rules).
Senate Democrats Push to Amend National Labor Relations Act
On June 13, Sen. Patty Murray, D-Wash., introduced the Workers’ Freedom to Negotiate Act of 2018, which included a variety of amendments to the National Labor Relations Act. The bill has 33 co-sponsors, all Democrats.
The bill would codify a “joint employer” as it is currently defined by the NLRB’s Browning-Ferris standard. That standard holds that any company that exercises “indirect” and “potential” contractual control over the employees of another company can be held liable for labor-law violations or be required to bargain with labor unions. As ACG has noted, this standard is problematic because, among other things, it broadly exposes companies that rely on contractors to unknown liability risk.
Given the current makeup of the Senate (unlike the House) and the likelihood that Republicans will maintain their majority in the upper chamber through the midterm elections, the bill is highly unlikely to gain traction. Still, it illustrates the pattern of dissatisfaction among Senate Democrats in response to potential efforts to narrow the scope of the joint-employer standard.
A broad joint-employer standard exposes companies that rely on contractors to unknown liability risk.
Funding Bill Includes Joint-Employer Rider
Meanwhile, on June 14, the Appropriations Committee released the fiscal year 2019 Labor, Health and Human Services, and Education funding bill, which included a rider related to the joint-employer standard. Specifically, the rider, added by Chairman Tom Cole, R-Okla., would prohibit enforcement of any joint-employer violations using appropriated funds.
ACG will continue to track and provide updates as the appropriations bill works its way to the House floor and the Senate.
Financial Services Committee Hearing: ‘Oversight of the U.S. Securities and Exchange Commission’
Thursday morning, the House Financial Services Committee held a hearing titled “Oversight of the U.S. Securities and Exchange Commission.” SEC Chairman Jay Clayton was the sole witness and spoke about his desire to continue the agency’s core mission of protecting “Mr. & Mrs. 401k,” encouraging capital formation and streamlining compliance requirements.
Of particular note was Clayton’s focus on the Volcker Rule and the definition of a covered fund, which he hopes to change through the rulemaking process in order to free up capital.
We have written about this issue previously, and ACG is in the process of analyzing the rule to provide comment.
Maria Wolvin is ACG Global’s vice president and senior counsel, public policy.
Ben Marsico is ACG Global’s manager of legislative and regulatory affairs.