NLRB Ruling May Have Implications for Comp

September 2, 2015 – In The News

Thomas R. Basta was featured in the WorkCompCentral article “NLRB Ruling May Have Implications for Comp.” Full text can be found in the September 2, 2015, issue, but a synopsis is below.

A recent ruling which “expanded the responsibility of franchisers and temporary work agencies for employees,” has led spectators to question the impact that the policy could have on workers’ compensation.

According to Thomas R. Basta of Fox Rothschild, “the ruling based the test for joint employment on the common law principle of ‘right to control,’ broadly meaning the employer must have the right to control the worker’s work. The board said in its decision that an employer doesn’t necessarily have to exercise that control in order to have the right to it.”

“There's two big groups that are affected by this decision: One, temporary employees that are provided by a staffing agency, and ... two, employees that work for a franchisee, like employees that work for McDonald's because they do individual franchises,” Basta continued.

Due to the fact that the National Labor Relations Board (NLRB) made the ruling, the policy is limited to collective bargaining. Although this is true, some have concerns that the ruling could make its way into the realm of workers’ compensation.

“This is a federal decision from the NLRB, and workers' compensation is the province of states,” Basta said. “My thinking on it is that this is really the first of several dominoes that need to fall before those employees that are affected are going to need workers' compensation.”

Despite the fact that the NLRB is a federal entity, some question if state level court decisions will follow its lead in embracing the joint employer concept. “My personal opinion is that some (courts) are going to do it and some aren't,” says Basta.

If joint employment does gain momentum in the future and is applied to workers’ compensation, Basta believes that staffing agencies and others who are effected may seek to enter premium-sharing agreements.

“I don't think that employers need to start running out and paying workers' compensation premiums for these individuals, I really think it should be more of a wait-and-see sort of scenario,” Basta said.