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This Is Uncomfortable

Firms, organized labor wait for major ruling

Mark Garrison Aug 14, 2015
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Heavy hitters in American business and organized labor are watching and waiting for a ruling expected any day now that could change the way they work forever.

The case before the National Labor Relations Board technically involves a waste management company, a union and a staffing company. But the impact could go far beyond that, potentially resetting how employment has worked for decades and impacting a whole range of companies and workers.

The case is about employees working for subcontractors or franchisees. As with many cases pitting industry against labor, there are sharp points of disagreement. But there’s consensus among all sides of the issue that the impact will be far-reaching because of what’s at stake.

Think of a big corporation that hires a company to clean its building, or a burger chain that franchises. Right now workers can’t collectively bargain with the corporation or fast food chain, only the subcontractor or franchisee. Unions don’t like that and want the NLRB to get corporations and chains to the bargaining table along with subcontractors and franchisees.

“Labor standards or protections for workers haven’t kept pace, and this is an opportunity simply to modernize the rules so that they keep the spirit of the law intact,” says Michael Wasser, from the pro-union group Jobs With Justice.

The disagreement begins with whether it’s a good idea to change things. Various industries are against this because they don’t want to be liable for subcontractors and franchisees.

“This will be so disruptive to those relationships, and what the board is suggesting it may go to would have really significant impact,” says Marilyn Pearson, a partner at DLA Piper, who advises corporate clients on labor issues.

Companies argue making them responsible for contractors would strangle profits and ultimately hurt jobs. Unions believe such a move would create a better environment for workers.

One final point of agreement: We may soon find out who’s right. The NLRB currently leans Democratic. Observers on all sides are betting it’ll rule in favor of the union soon.

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