The National Labor Relations Board’s changed standard for determining joint employer status may have implications for senior living operators.

Instead of having “direct and immediate” control over terms and conditions of employment, as had been the previous standard, a company now must exhibit only the potential to exert such control.

“We are concerned that the NLRB ruling could encourage unions to use new organizing tactics focusing on temporary staffing agencies, forcing our members to negotiate with yet another union,” Greg Crist, senior vice president for public affairs of the American Health Care Association/National Center for Assisted Living, tells McKnight’s Senior Living. “It is unclear at this time exactly how this ruling will play out—especially since it is likely to be appealed in the federal courts.” AHCA/NCAL will continue to monitor the situation, he adds.

The NLRB said that its previous joint employer standard had failed to keep pace with changes in the workplace and economic circumstances. More than 2.87 million of the nation’s workers, it noted, were employed through temporary agencies in August 2014.

In the 3-2 decision, issued Aug. 27, the board said that two or more entities are joint employers of a single workforce if:

  • they are both employers within the meaning of the common law;  and

  • they share or co-determine matters governing the essential terms and conditions of employment.

The specific case in front of the NLRB involved Browning-Ferris Industries of California and Leadpoint, a company that supplied employees to BFI to clean and sort recycled products and perform other duties. The board ruled that BFI was a joint employer with Leadpoint because BFI had indirect and direct control over essential terms and conditions of employment of the employees supplied by Leadpoint. Also, BFI had reserved authority to control such terms and conditions.

So how might the ruling affect senior living? Operators that use temporary workers or contract for certain work and have maintained that the temporary employment agencies or contractors they use have control over worker wages and working conditions may find themselves a joint employer under the refined definition. That means that they, the operators, ultimately are responsible for decisions related to such matters.

The same rationale would apply to operators that have franchises, and, writing in The NonProfit Times, attorneys Ronald W. Taylor and Jeffrey S. Tenenbaum of Venable LLP in Washington, D.C., say that nonprofit organizations also will want to examine their relationships with “parent, subsidiary, chapter, and other affiliated organizations.”

The decision will ease unions’ ability to negotiate on behalf of workers, Crist and others say. Whether that ability is a positive change depends on one’s perspective.

Richard Trumka, president of the AFL-CIO, a federation of 56 unions representing 12.5 million workers, says the decision “may very well signal the beginning of the end of outdated laws that fail to address an economic structure tilted against working people. It means more working people can engage in meaningful collective bargaining by bringing all parties who control their wages and other conditions of employment to the table.”

The U.S. Chamber of Commerce, however, has expressed “strong opposition” to the decision. “The Browning-Ferris case could lead many employers to significantly alter or limit the contractual agreements into which they enter,” says Randy Johnson, the group’s senior vice president for labor, immigration and employee benefits. “This will reduce employer flexibility and competition at a time when the economy continues to experience anemic economic growth.”

The Competitive Enterprise Institute agrees. The decision will have a “devastating economic impact,” according to the non-profit public policy organization, which favors limited government and free enterprise.

“The decision will force franchise and contract businesses into a one-size-fits-all business model when it comes to liability and wage issues,” says Iain Murray, the group’s vice president for strategy. “That may be good for labor union bosses and trial lawyers in search of big targets of opportunity, but it will hurt anyone who now benefits from flexible work arrangements.”

Murray predicted that some companies will eliminate positions or move them to their headquarters “to minimize unexpected liability.”

The American Staffing Association, however, predicts that the ruling will have little effect on the staffing industry. “Although we cannot definitively predict the long-term impact of the decision, prior board decisions that effectively made it easier for temporary workers to unionize did not demonstrably result in increased unionization of such workers,” says Stephen Dwyer, general counsel for the organization.