UPDATE 12/7/15: A reader has responded with some of his own thoughts on this issue, and we've decided to print his response beneath the original article. Please take a look!
Recently, a federal agency made a dramatic and little-known change governing the relationship between businesses and employees that industry experts worry could “cripple” contractors and subcontractors alike.
In the Browning-Ferris case, the National Labor Relations Board ruled that a waste management company and a staffing agency were joint employers. The ruling is important because it essentially makes it easier for subcontractors to collectively bargain and unionize.
“If this ruling is allowed to stand, it will cripple small businesses across the country, including the home building industry as it is in its fragile state of recovery,” warned Tom Woods, chair of the National Association of Home Builders in a statement.
That’s not necessarily hyperbole, according to Craig Martin, a construction labor law expert who is a partner in the law firm of Lamson Dugan and Murray LLP. With a background and experience in all aspects of construction law, he counsels contractors and subcontractors in various construction disputes. Here’s what he had to say about the NRLB ruling:
Replacement Contractor (RC):What is the simplest explanation you can give for the ruling and what it changes?
Craig Martin (CM): The NLRB is appointed and currently there are three democrat and two republican appointees. The board typically follows the political agenda of the party in control.
The NLRB signaled its intentions several months ago when it sought input on its review of the Browning-Ferris case. The NLRB’s General Counsel submitted a brief urging the board to relax the standard that had been in place since 1984.
The standard since that time required an entity to exercise direct and immediate control over another business’s employees before it would be considered a joint employer. Now, an entity may be considered a joint employer if it exercises indirect control.
RC: How will this ruling affect remodeling contractors who are part of franchises or work with staffing agencies?
CM: If a contractor is part of a franchise and the contractor’s employees elect to organize, the franchisor may have to come to the bargaining table to negotiate terms of employment, such as wages, benefits, and the like.
The franchisor could also be on the hook for unfair labor practices. In the past, without a joint employer finding, the franchisor was not a party to unfair labor practice actions — only the actual contractor/employer was involved.
This opinion could also impact construction projects in that the owner and/or general contractor may be considered the joint employer of all subcontractor employees. Unions could then target owners or general contractors with pickets, which until now would have been illegal secondary conduct.
Unions may also be able to seek to organize on a national level. For example, if a large franchisor, such as McDonalds, is found to be a joint employer with all of its franchisees, the union may seek to organize all employees of the franchisor.
RC: What recommendations would you have for contractors who are affected?
CM: Employers are always well served to discuss the benefits of being union free with their employers. It is best when these discussions take place before any union activity is afoot.
Employers can explain the impact of joining a union, such as the cost to the employee in dues, the impact of the employer to competitively bid on projects, etc.
RC: Is this likely to stand or will there be some other revision or challenge to the ruling?
CM: The opinion can be appealed to the Court of Appeals. Given all the press involved in this decision, I would expect that it will be appealed. But the appeal would have to wait until after the election and any appeal will take months, if not years.
Reader Response 12/7/15:I read with great interest the article by Gary Thill in the Nov./Dec. 2015 issue of Remodeling Magazine that was received in my office.
The article was named "Is a Union Fight in Your Future?" Frankly, I am appalled. I am not one to judge others on their beliefs or ideals, but this article offended me on several levels.
First, The article actually does a good job with briefly describing the basics of the Browning-Ferris ruling by the NLRB. What was disturbing is the advice given in the article to franchisers or other employers as it relates to the ruling.
Franchised General contractors have a duty to know about the companies with whom they sub-contract work. If those companies are union, and have a union contract, they should simply take the time to have legal counsel advise them to insure there are no violations to those workers contract. By making sure rules are followed up front, makes for less issues down the road period. If a franchiser is unwilling to, or is opposed to the idea of unions, maybe the best course of action would be simply not hire them.
There are plenty of companies
in several municipalities that specify, recommend and in some cases, by local
agreements, require that the work be performed by union contractors. Educate
your self first before gearing up for a fight.
The article further advises that "Employers are always well served to discuss the benefits of being union-free with their employees." That is perhaps the most discriminatory and untrue line of the entire article. Unions have long stood for basic worker rights. They are the ones who brought us all the weekends off, a 40 hour work week, and laws against child labor. Do some research, the benefits unions have brought us all far outweigh any employer perceived benefit of remaining "union-free".
Unions have provided Health care benefits, retirement savings and Medical savings accounts to hundreds of thousands of workers. This relieves individual employers from the burden of administering such benefits that keep worker turn over at lower levels and save companies money for having to administer those and other programs.
Trade unions have provided the very best in skilled labor training. They have set the standard for workplace safety. Employers have enjoyed knowing that union contractors have been trained to the latest standards of the industry and have proven work hours to apply those skills. Ask any Journeyman trades member how many hours of training and field work they had to do to receive their card. I'll bet it is far above the training most employers provide.
Perhaps, the article should have given the advice to at least look at the benefits of union workers rather than gear up for a fight with them.