---
title: "New Federal Rule Trouble for Small Businesses"
url: https://burnaze.com/article/d50bcf3e-1994-449d-b020-92735a43fd44
source: "1851 Franchise"
original_url: https://1851franchise.com/new-federal-rule-trouble-for-small-businesses-2778
category: "Regulation"
topics: ["Regulation & legal"]
published: 2015-10-30T20:15:46.000Z
modified: 2026-11-01T12:18:57.943Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/cb46778239d76b2cbfce48ba747192384340151030154346.png
---

# New Federal Rule Trouble for Small Businesses

**TL;DR:** The National Labor Relations Board (NLRB) has issued a new ruling redefining joint employer liability, which may negatively impact small businesses and their contractors. The ruling holds companies liable for the labor practices of their vendors, even if they only have indirect control over contracted employees.

*originally published in 1851 Franchise on 2015-10-30. [Read the original](https://1851franchise.com/new-federal-rule-trouble-for-small-businesses-2778).*

## Story

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.”

## Entities

- 1851 Franchise (publication)
- General (sector)
- National Labor Relations Board (regulator)
- small businesses (topic)
- nlrb rule (topic)
- joint employer liability (topic)
- labor practices (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/new-federal-rule-trouble-for-small-businesses-2778). Summarized by Burnaze (https://burnaze.com/article/d50bcf3e-1994-449d-b020-92735a43fd44).