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Labor Regulations

Labor Relations

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The NRF Retail Opportunity Index encourages Congress to support workforce investment by supporting jobs and economic growth rather than union organizers and expensive new regulations and mandates. Learn more.

The Issue

The Labor Department has recently reversed a pair of Obama-era rules that expanded the definition of a “joint employer” and thereby increased the exposure of companies to both labor-related lawsuits and union organization attempts involving their subcontractors and franchisees. The National Labor Relations Board is expected to roll back similar rules of its own – and perhaps anti-business rulings on other issues – after two new members nominated by President Trump are confirmed by the Senate. But an NLRB “micro union” ruling remains on the books, along with measures allowing “ambush” union organizing elections and requiring companies to give unions personal information on workers such as home addresses, telephone numbers and email addresses. With those issues yet to be resolved, NRF is working to restore the NLRB and Labor Department to their traditional and intended roles as neutral arbiters of labor disputes rather than advocates for organized labor.

Why it Matters to Retailers

Faced with years of declining membership in traditional strongholds such as manufacturing, union leaders have made it clear that they want to target traditionally non-union industries. Among these is retail, where only about 5 percent of employees are union members. Under the expanded joint employer definition, unions can seek to organize workers at small, locally owned franchise locations as if they were part of the larger company granting the franchise. Employees of a subcontractor could also be subject to organizing efforts as if they worked for the company that hired the subcontractor. The micro-union ruling goes in the opposite direction, allowing a different union to be formed at each store in a retail chain or different unions within each department of an individual store. Doing so would make it difficult for a national or regional retailer to move workers between stores or departments or cross-train them for different jobs.

NRF advocates for balanced labor laws

NRF chairs the lobbying committee of the Coalition for a Democratic Workplace, which was formed a decade ago to oppose anti-business labor laws, regulations and rulings that threaten job creation and economic growth. NRF supports workplace rules that promote workplace flexibility and economic growth, while opposing onerous policies that intrude on business operations, undermine employees’ privacy rights, and lead to unnecessary costs for retailers. NRF has worked with the Obama and Trump administration, in Congress and in the courts to oppose the joint employer, ambush election and micro-union measures.

This June, the Labor Department announced that it was dropping standards issued in 2016 that said two companies that are only technically separate – such as different divisions of the same corporate parent – could be considered joint employers. Also dropped were standards saying a company could be a joint employer of workers hired by an intermediary such as a staffing agency. NRF welcomed the end of those regulations, but related standards established under an NLRB ruling in 2015 remain in effect. In that ruling, the NLRB abandoned a 30-year position that a company had to have direct control over the actions of a subcontractor or franchisee’s employees to be considered a joint employer. Instead, the board said a company could be a joint employer even if it had direct or unexercised control. In a related case, the NLRB said restaurant chain McDonalds could be considered a joint employer with its franchisees. The NLRB ruling is under appeal in a lawsuit supported by NRF, and Senate approval of Trump’s two nominees to the board would give Republicans a majority on the panel that could lead to a reversal of the position. In addition, NRF told a House committee in July that legislation is needed to ensure “a commonsense standard of joint employer liability” that would provide employers with “lasting certainty in labor relations.” The Save Local Business Act was introduced two weeks later, and would restore the requirement for direct control before a company can be considered a joint employer.

NRF and the Coalition for a Democratic Workplace undertook a years-long series of legal actions to block the ambush election regulations, which allow a union organizing election to take place in two weeks after it is requested by a union rather than the previous average of five weeks. Employers are also required to provide workers’ personal contact information within two days. NRF argued that the rules were unconstitutional and went beyond the NLRB’s authority, and said that they would deprive employers of adequate time to argue against unionization. A federal judge nonetheless upheld the regulations in 2015. Two bills that would reverse the rules – the Workforce Democracy and Fairness Act and the Employee Privacy Protection Act, are pending in Congress.

NRF has also fought against the micro-union ruling, saying it was legally flawed. The NLRB nonetheless approved formation of a micro-union for cosmetics and fragrances workers at a Macy’s store in Massachusetts. And micro-unions have been upheld in the courts despite friend-of-the-court briefs filed by NRF and other business groups. As with ambush elections, legislation is pending that would reverse the ruling – the Representation Fairness Restoration Act and the Workforce Democracy and Fairness Act.