The current happenings in the city of Seattle are a good example of joint employment circumstances. At the moment, there are 10 skyscrapers that are under construction, reflecting the surge of construction in the Seattle area over the past several years. This surge of construction brings legal questions regarding joint employment and employee rights in those situations.
Large Construction Project
Suppose a large construction project is underway. The city awards the project to a specific construction company that has a moderately sized construction crew. While that company will handle the bulk of the construction, the company will also subcontract to other contractors as part of the entire project. The company may have all the components for excavating the foundation, masonry associated with pouring the foundation, framing the building, and building the internal parts of the building, but it may outsource electrical, plumbing, painting, and stairs.
To equip the building with power, the company contracts with an electrical engineer. The engineer will bring in people to run the electrical circuits. The engineer may join the project at numerous phases. According to the plans submitted to the city planning board, the company workers will be working simultaneously with the electrical team. When they are working simultaneously, the company workers and the electrical workers will both be under a joint supervisory of the construction company foreman and the electrical company foreman.
Under current law, while the workers are under joint supervision, both the primary and secondary employers supervising the employees fall under employee protection laws. Consequently, a joint employee has the right to sue either his employer or the other company for issues like a hostile work environment.
For instance, if someone who has a disability feels discriminated against, then each employer can be liable. That is to say, even if the disabled person is an employee of the construction company and not the electrical engineering company, he or she can sue either company for violating his or her rights.
This also has implications for franchises. Many large hotel chains, like the Hilton hotels, are franchised. Workers of a specific Hilton would be able to sue both Hilton and the owner of that hotel. Businesses felt that was unfair.
Under the Trump administration, the National Labor Relations Board (NLRB), which is the government body tasked with overseeing and enforcing labor rights, pulled the joint employer standard. The NLRB explained that the standard is bad for business. The AFL-CIO, the large Union covering employees, found the move to be very troubling, saying that it hurts employee protection.
It is an open question how this will affect some Seattle businesses, notably those in construction. Recently, Seattle has seen a slowdown in new construction. This may be due to oversaturation or due to rising costs, particularly with surging oil prices. Does the lack of joint employment make new construction projects more likely because of lower liability costs? Or do weaker protections keep employees away? Time will tell.
Labor issues? Contact the Washington state employee attorneys at HKM.