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Fast-Food Corporations Are Still Responsible for Franchisee Labor Violations

The Labor Board has reversed its joint employer position, and will leave an Obama-era rule intact

Photo by Justin Sullivan/Getty Images

The National Labor Relations Board just made a surprising flip-flop that could make it easier for fast-food workers to unionize and/or fight for higher pay: After overturning an Obama-era rule back in December that essentially redefined what it legally meant to be an employer, the board rescinded that decision on Monday.

The issue at hand involves “joint employers” — that is, who is held responsible for how employees are paid and otherwise treated when more than one group supervises their work (i.e., a cashier at McDonald’s who falls under both the McDonald’s Corp. and the owner of an individual franchise). In 2015, the NLRB ruled that in such cases, the corporation could be considered a joint employer and could therefore be held liable if their franchisees committed wage violations or union busting, among other illegal labor practices.

The NLRB’s December 2017 decision, handed down just a couple months after the board gained a Republican majority, reversed that ruling — making it harder for corporations to be considered joint employers. Worker advocate groups argued that the December ruling would make it harder for franchise workers to unionize, and allow big chains to shirk responsibility when their franchisees committed labor violations.

As the New York Times explains, reversing the rule reversal “did not reflect any ideological shift” at the federal government agency in charge of enforcing labor laws as they relate to unions and unfair labor practices. Rather, it was because one Republican board member whose vote helped overturn the rule last year was found to have a conflict of interest: William J. Emanuel’s former law firm handled a related case and therefore he should have recused himself from the vote, which would have left it tied two to two, leaving the 2015 ruling intact.

Christine Owens, the executive director for the National Employment Law Project, said in a statement:

This development is important for two primary reasons: (1) workers in temp and staffing and other subcontracted jobs who seek to join together and bargain for better working conditions can do so; and (2) the NLRB is not above the law when it sets forth rules on how employers treat workers today...The notion that companies empowered to control working conditions also must bear responsibility for them is what the long-standing legal concept of joint employment is all about. And this principle is more important now than ever before, with the realities of how businesses structure their employment relationships.

Meanwhile, big corporations like McDonald’s, which had fought tooth and nail against the joint employer ruling since it was first put in place in 2015, are likely to fight this any way they can. The National Restaurant Association is also sure to speak out against the reversal; the conservative business interest group previously expressed concern that the 2015 ruling threatened the franchise model that many restaurant chains operate under. The group did not immediately respond to a request for comment.

Labor Board’s Do-Over Leaves an Obama-Era Rule Intact [NY Times]
Labor Board Overturns Ruling That Protected Fast-Food Workers [E]