Austin Knudsen

Rep. Knudsen: NLRB Decision Bad for Business

Recently, the National Labor Relations Board, or NLRB, overturned a decades-old legal precedent, instituting new onerous standards on employers. These new standards are just another in a long line of federal overreach by the Obama administration that has potentially devastating consequences for America’s job creators.

In the case of Browning-Ferris Industries (BFI), the NLRB was asked to consider whether BFI was a joint employer with Leadpoint, a staffing services company whose employees worked at a BFI recycling plant prior to a Teamsters Union election.

The facts of the case where these; BFI contracted Leadpoint to sort recycling materials. Leadpoint employees would separate plastics, paper, glass and other recyclables onto conveyor belts that fed into recycling equipment operated by BFI employees. Leadpoint and its staff were solely responsible for hiring/firing, pay scales, and schedules for their employees. BFI and its employees where solely responsible for operating the plant. This included hours of operation and monitoring the performances of their employees and contractors.

Despite existing legal precedent, The NLRB determined that the responsibilities of BFI were significant enough to make BFI a co-employer of Leadpoint’s workers. It is worth noting that in this case Obama’s NLRB voted along party lines to create a new “joint employer” standard in federal labor laws – the outcome desired by the Teamsters Union.

The consequences of this decision could have potentially devastating effects on small business owners in Montana and across the country. As described by the dissenting members of the NLRB, “the number of contractual relationships now potentially encompassed within the majority’s new standard appears to be virtually unlimited.”

If this decision stands, the NLRB is now armed with a vague and ambiguous standard that it can use to target any employer. By replacing a long-standing predictable test with this new standard that gives business no clear guidelines to follow, the NLRB will now evaluate the evidence on a case-by-case basis giving them the sole discretion to pick winners and losers based on whatever standard they choose to apply. Obama’s NLRB has now created one of the best weapons for their Union cronies to advance their agenda.

So what does all this mean for business owners? It means that Unions can now mount corporate campaigns against franchisors to advance their agenda, forcing not only the corporate franchisor but also the locally owned and operated franchise into union contracts. This doesn’t stop with the franchisor/franchisee business model however; any company that use contract employees can now also fall victim to this new standard.

Consider this example from James Sherk, featured on, of a company that cleans buildings for several clients. If one union organized the cleaning company at every site simultaneously, the company and all of its clients would collectively negotiate a Collective Bargaining Agreement (CBA). This would mean a joint bargaining session between multiple clients/employers with differing priorities — potentially including competitors that want to disadvantage each other. The cleaning company would have to share its rate for each client, usually confidential information, with all of its clients. After reaching such a CBA, clients would have difficulty changing their cleaning contract. They would have to not only negotiate with the cleaning firm, but also bargain with the union and the other employers.

Make no mistake; this potentially disastrous new rule was put in place by Obama’s NLRB for one reason – political payback for their union cronies.
Austin Knudsen is the Speaker of the Montana House of Representatives. Outside of politics, Austin is an attorney and also farms with his family at Culbertson and Bainville.


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