It’s grossly unfair and illogical for the Biden Administration to extend federal labor requirements to businesses that do not hire, fire, set wages or supervise employees, and it jeopardizes thousands of businesses and potentially millions of American jobs.

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Should American businesses be held liable for millions of people whom they didn’t hire, don’t directly control and probably don’t even know exist?  

Under decades of settled court precedent and administrative law, the answer remains an obvious “no,” which accords with most people’s concept of fairness and logic.  

In its unruly crusade to administer fixes to things that aren’t broken, however, the Biden Administration has a different idea.  

At the behest of powerful labor unions and trial lawyers, it seeks to upend established law and impose a Labor Department regulation that exacerbated the Obama era job market malaise.  

At issue is what's known as the "Joint Employer Rule," which would hold multiple businesses legally liable for the same employee.  Under that radical departure from logic and established law, even employers with indirect or even merely theoretical ability to control employment conditions could suddenly find themselves subject to federal labor law mandates.  

As you probably guessed, that constitutes a gift to trial lawyers and unions that want to organize franchises nationwide as a single business, serving their interests by expanding the definition of “employer” as expansively as possible.  Accordingly, businesses that franchise or use sub-contractors, independent contractors or even temp agencies could be deemed “joint employers” for purposes of union organizing or lawsuits.  The transparent goal is to simplify unionization in fragmented workplaces with multiple subcontractors, and to corral businesses with deeper pockets into courtrooms and negotiating tables.  

That would upend longstanding court precedent and National Labor Relations Board (NLRB) interpretation, under which an "employer" is defined as a business that more directly determines the essential terms and conditions of employment.  In 1982, the U.S. Court of Appeals ruled in NLRB v. Browning-Ferris Industries, citing U.S. Supreme Court precedent in Boire v. Greyhound Corp. (1964), that only businesses exercising control over "those matters governing the essential terms and conditions of employment" were subject to collective bargaining requirements and liabilities.  Two years later, the NLRB formally adopted that standard, ruling that "there must be a showing that the employer meaningfully affects matters relating to the employment such as hiring, firing, discipline, supervision and direction."  

In other words, an "employer" for purposes of labor law requires direct and immediate control over the terms and conditions of employment.  That stands to reason, since it makes no sense to impose legal liability upon employers that don't actually govern a bargaining unit's employment conditions.  

In August 2015, however, the Obama Administration’s NLRB needlessly upended that established legal standard by imposing the Joint Employer Rule.  That instantly jeopardized hundreds of thousands of franchise businesses across America and the millions of people they employ, and constituted a gift to union bosses and liberal politicians who receive union campaign donations.  With union membership continually declining and their ability to influence elections waning, they're desperate to uncover new sources of dollars and leverage. 

In 2020, the Trump Administration NLRB formally reversed the Obama Administration attempt to redefine the law, ruling that the nation’s labor laws “are not furthered by drawing into a collective-bargaining relationship, or exposing to secondary coercion and joint-and-several liability, a direct employer’s business partner that does not actively participate in decisions setting employees’ wages, benefits, and other essential terms and conditions of employment.”  

Now, however, the Biden Administration seeks to subject the nation to legal whiplash by reimposing the chaotic Joint Employer Rule of the Obama Administration.  

In response, Members of Congress have introduced the Save Local Business Act (H.R. 3185/S. 1636), which would preserve existing common-sense labor law and protect employers against the Biden Administration attempt to radically redefine the nature of employment to the detriment of struggling businesses across the nation.  The bill would rightly limit “joint employers” to those that “directly, actually, and immediately exercise significant control over the essential terms and conditions of employment.”  

That’s critical, because according to a recent American Action Forum study, the Joint Employer Rule could reduce private sector employment by nearly 2 million jobs, including 500,000 in the leisure and hospitality industry alone.  In addition to the direct impact of jobs lost, that also translates to taxpayer pain in the form of more unemployment payments, Medicaid enrollment and other forms of government assistance.  

It’s grossly unfair and illogical for the Biden Administration to extend federal labor requirements to businesses that do not hire, fire, set wages or supervise employees, and it jeopardizes thousands of businesses and potentially millions of American jobs. Congress can take an easy and important step toward improving economic and employment conditions by passing H.R. 3185 and S. 1636, the Save Local Business Act.