New Federal Rule Trouble for Small Businesses

Small, independent businesses are the backbone of the economy, but a new National Labor Relations Board ruling threatens the entrepreneurial spirit of small businesses across the country.

The NLRB ruled in a landmark case—known as Browning-Ferris—that a company is now considered a “joint employer” when it harnesses the use of specialized services and administers any level of direct or indirect control over contracted employees.

“In other words, if my company hires a custodial service to clean our facility—or security guards or any kind of subcontractor—I am now held liable for the labor practices of the vendor we choose to perform this specific services,” said Michael Cadorette, a small-business owner and employer in Biddeford, Maine.

Cadorette explained in The Portland Press Herald that the NLRB’s new joint-employer rule will undermine the operations of employers by joining them at the hip with larger companies instead of allowing them to independently control their own labor practices.

“In light of this decision, small-business owners, general contractors and franchisee businesses now become exposed to a host of restrictions that threaten the balance of our business goals and workforce,” Cadorette added. “Whether we identify an outside service as a core function of our business or not, the NLRB is deciding that we suddenly have to completely reconsider our business relationships, and potentially even bring all non-core functions in-house.”