2020 Year-End Review for Employers

In the final year of the Trump administration, the Eugene Scalia-led Department of Labor (“DOL”) and National Labor Relations Board (“NLRB”) Trump-appointed General Counsel issued various pro-employer rulings that reversed many of the Obama era pro-union rulings. Below is a summary of those rulings, as well as other potential legal updates that employers should be aware of.

Joint Employer Issues

On December 12, 2019, the NLRB decided cases impacting challenges at McDonald’s which had been attacked as responsible for employment issues of their franchisees. The NLRB sided with McDonald’s, holding they were not a joint employer with the franchisees.

On December 14, 2017, the NLRB reversed the 2015 Browning-Ferris Obama era decision that made it harder for companies to avoid joint-employer responsibilities. Browning-Ferris held that joint-employers did not have to exercise direct control of another business’ employees.

Under the Trump NLRB, the definition of “joint employer” was narrowed to exercising “substantial direct and immediate control” over employees.

Protecting the Right to Organize Act (PRO Act)

The proposed ”PRO Act,” which would make it easier for unions to organize workers, passed the House, but the Senate has not acted on the bill. Under the Pro Act, the NLRB could fine employers who violate the law and would weaken right-to-work laws. President-elect Joseph R. Biden supports the law.

Independent Contractors

Employers who classify workers as independent contractors, rather than as employees, avoid additional labor costs such as workers’ compensation and taxes. The most high-profile cases involved Lyft and Uber drivers. Specifically, California’s Proposition 22, which classifies drivers for app‑based transportation and delivery companies as “independent contractors,” passed on November 4, 2020 and goes into effect December 17, 2020.

On September 22, 2020, the D.O.L. proposed a rule that would measure if workers were actually in business for themselves or if they were classified as an employee under the Fair Labor Standards Act (FLSA). Critics held that it was too easy for employers to classify workers as independent contractors.

Looking Ahead to 2021

While the Trump administration favored employers as noted above, the coming Biden administration may reverse most of these trends.