Worcester Business Journal

In bank mergers, culture trumps strategy 17 Barre Savings felt Fidelity was best fit. WBJ >> To Subscribe Central Massachusetts' Source for Business News October 12, 2015 Volume 26 Number 22 www.wbjournal.com $2.00 FOCUS Energy Heating prices fall while power prices rise, as the region remains tied to the ups and downs of natural gas. 12 Q&A with Jay Samit, CEO, SeaChange International, Acton Shop Talk 8 WHO'S THE BOSS? Labor ruling complicates use of temp workers C ompanies using temporary workers and fran- chises will face a multitude of new legal and labor issues, now that the National Labor Relations Board has called into question who actually employs those people. In a 3-2 ruling in late August, the NLRB found California waste management company Browning-Ferris Industries is now considered to be a "joint employer" of workers it hired through a staffing firm, because it has the authority to control aspects of their employment. "Clearly the regulation is going to be challenged in court, but if it, in fact, survives, I think you would see a lot of companies rethinking using third par- ties, using contractors," said Christopher P. Geehern, executive vice president of the Associated Industries of Massachusetts, which represents many manufacturers and other employers. Geehern said the ruling creates two big concerns for companies using staff- ing agencies. First, the agencies' workers might decide to unionize, which could drag companies into negotiations with workers they don't directly employ. If that happened, a company could also be legally prohibited from cancelling the contract with its agency and switching to a different firm. Second, a company could be forced to answer for labor violations committed by its contractor. "So, in essence the employer could be held liable in the eyes of the law for employees that they supervise only indi- rectly," Geehern said. The logic of the NLRB decision could also apply to franchises, with franchisors like Dunkin' Donuts and McDonald's sharing responsibility for the treatment of employees with the franchisees that own individual locations. "This may set a precedent for the definition of joint employers," said Demitrios M. Moschos, a partner at Worcester law firm Mirick O'Connell law firm. The ruling "will make it dif- ficult for franchise businesses in the country to facilitate local franchise ownership." That worries Robert Branca, who, together with several business part- ners, owns dozens of Dunkin' Donut shops across several states. Branca, who's also a lawyer, said it seems clear the NLRB ruling would also apply to franchises since big companies like Dunkin' Donuts and McDonald's set the conditions of workers' employment – from how many cashiers are on duty at any given time to how fry cooks put together a Big Mac. The business model is part of what companies like his buy when they sign a franchise agreement, Branca said. but he added it's not right to say his company isn't a real employer. College collaboration leads to self- insurance savings O ne year ago, when Worcester Polytechnic Institute dove into the high-risk, high-reward world of self-insurance, it hoped the gamble would pay off enough to keep tuition in check. Luckily, WPI had friends. WPI joined a new collaborative of col- leges and universities – called Educators Health LLC, or EdHealth – that has allowed small- to mid-sized schools to pool their self-insurance efforts and keep potential outlandish costs in check. The result over that first year was less risk and more savings. Ditching full-coverage from insurance companies is typically a luxury reserved for large companies. Firms like Hopkinton computer giant EMC can customize their coverage while retaining money unspent on claims that would normally be profits for insurance companies. With a large pool of employees, they can spread the risk of rare, multi-million-dollar claims. WPI, with its 1,053 employees, was better off than most small employers entering self-insurance, but by joining the EdHealth collaborative with a pool of 8,900 employees of 11 schools, including Boston College, it had significantly more negotiating power. The organization was launched in 2013 with the singular pur- pose of helping schools self-insure. The greatest portion of WPI's expenses are salaries and benefits, and the school is trying to keep that line item in check in order to keep tuition costs as low as pos- BY SAM BONACCI Worcester Business Journal Staff Writer >> Continued on Page 9 >> Continued on Page 10 Franchise owner and attorney Robert Branca says the possibility of employee unionization that's opened up by the NLRB ruling creates a dilemma in determining how the parent company and its franchisees might interact in negotiating a union contract. P H O T O / E D D C O T E BY LIVIA GERSHON Special to the Worcester Business Journal

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