Dive Brief:

• The National Labor Relations Board ruled Thursday that companies can be held equally responsible for labor violations committed by their contractors, reports The Hill.
• Waste management firm Browning-Ferris was determined to be a joint-employer with a contractor they used in Phoenix, meaning they could “be pulled into collective bargaining negotiations with those employees and held liable for any labor violations committed against them,” said The Hill.
• This ruling is a departure from labor laws in the past that said that companies are only responsible for employees that are under their “direct control.”

Dive Insight:

This ruling is lauded by unions, but seen as extraordinarily disruptive for how a multitude of industries handle staffing throughout the country.

“The ruling seeks to redefine what constitutes an “employer” in the United States and could potentially upend entire industries,” writes The Hill. Companies will most likely move to bring employees often handled by outside contractors in-house, meaning this could affect industries as far and wide as retailers, construction firms, hotels, security providers and cleaning services.

Restaurant franchises could see the biggest effect of this ruling, especially fast food restaurants, which could cut ties with franchisers all together. HR within these industries may be scrambling in response. More news surrounding this ruling is bound to come.