The decision by the National Labor Relations Board could upend the traditional arms-length relationship that has prevailed between corporate titans such as McDonald’s and its neighborhood fast-food franchises. And it comes as concerns are growing about a generation of new Internet-fueled business such as Uber and Lyft that depend heavily on independent contractors.
In a case that drew intense lobbying by both business and union groups, Democratic appointees on the panel split 3-2 with Republicans to adopt a more expansive definition of what it means to be an “joint employer,” making it more difficult for companies to avoid responsibility through various forms of outsourcing.
In doing so, the panel sided with labor advocates and academics who have described an increasingly “fissured” economy, in which whole industries have been built on business models that offer workers few of the protections of a traditional employer relationship.
“With more than 2.87 million of the nation’s workers employed through temporary agencies in August 2014, the Board held that its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances,” the Board said in a release accompanying its decision.
A federal labor board voted Thursday to redefine the employee-employer relationship granting new bargaining powers to workers caught up in an economy increasingly reliant on subcontractors, franchisees and temporary staffing agencies.