The National Labor Relations Board just made life a little harder for fast-food workers. On Friday, the board published a newly proposed rule that severely limits the extent to which companies can be held responsible for how their franchisees treat workers, the New York Times reports, rolling back an Obama-era decision that’s been in place since 2015.
At the center of this controversial decision is the concept of “joint employers” — essentially, who is held responsible for how workers are treated when more than one entity controls or supervises their work (e.g., McDonald’s the corporation and the independent franchise owner).
Under the proposed regulation, a company could be considered a joint employer “only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine.” Under the previous ruling, set in 2015 when the NLRB was ruled by a Democratic majority, “even employers that controlled other companies’ workers indirectly — say, through software that locked franchisees into certain scheduling policies — could be considered joint employers,” as the Times explains.
As the federal agency responsible for enforcing U.S. labor law, the NLRB’s proposed rule will affect many businesses that operate under a franchise model, big fast-food corporations such as McDonald’s, Subway, Taco Bell, being the most prominent. Labor and worker advocacy groups argue that the new ruling would permit big corporations to look the other way when their franchisees commit labor violations such as failing to pay overtime or failing to ensure a safe workplace, and hinder franchise workers’ ability to unionize.
The NLRB initially moved to roll back its previous joint-employer ruling in December 2017, but then vacated that decision in February after it was revealed that one of the board members had a conflict of interest in the case, which involved a company called Hy-Brand, and should have recused themselves.
The proposed rule is also drawing criticism from Democrats such as Sen. Elizabeth Warren, who said in a statement, “After getting caught violating ethics rules the first time, Republicans on the board are now ignoring these rules and barreling towards reaching the same anti-worker outcome another way.”
The public now has 60 days to submit comments on the NLRB’s proposed rule. The board is is supposed to consider said comments when finalizing the rule, but does not necessarily have to alter its proposed regulation in response to them.
• Board Proposes Rule to Change Its Joint-Employer Standard [NLRB.gov]
• Labor Board Moves Anew to Limit Employers’ Workforce Liability [New York Times]