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Companies applaud NLRB's retreat from 'joint employer' guidance

Joe Mont | June 14, 2017

With just a few words, the Department of Labor has withdrawn one of its most controversial actions of the Obama Administration.

In a brief statement on June 7, Secretary of Labor Alexander Acosta announced “the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors.”

The statement is likely to be music to the ears of franchised businesses, restaurant chains, and retailers embroiled in lawsuits over who is, or is not, technically an employee.

In August 2015, a ruling by the National Labor Relations Board abandoned 30 years of precedent by redefining and expanding the concept of “joint employer.” As a result, any company that relies on other businesses for contract labor, or uses a franchise business model for its operations, has much greater risk for labor conditions at those other businesses, even though the original company is a separate entity from those partners. Guidelines released in...

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