Terry H. Schwadron
March 1, 2020
Donald Trump-appointed Republicans to the National Labor Relations Board have issued a new rule this week that makes it harder for fast-food workers and those in other “joint franchise” businesses to organize in unions. It overturns the exact same decision reached by a Democratic majority five years ago.
It’s a reminder that every time you want to turn away from politics because it is too partisan, some governmental policy reaches up and smacks you in the face.
What’s at issue here, of course, is the trend for the McDonald’s of our country and internationally to set up franchises that allow corporate management to earn more profit, to insist on work rules, wages and product lines, but then to sit back when there is a worker problem and say that is the business of the franchise holder.
The rule change taking effect in April “restores the joint-employer standard that the Board applied for several decades” before a 2015 decision with increased precision and guidance, the NLRB said. The final rule defines key terms, including what are considered “essential terms and conditions of employment,” and what does, and what does not, constitute “direct and immediate control,” defining what constitutes “substantial” direct and immediate control.
Having worked with fast-food workers in their Fight for $15 campaign, what I learned was that these are hard-working, largely minority, adult workers who often work multiple jobs at minimum wage to try to piece together a surviving living. Fast-food companies generally reflect that these are jobs for teenagers rather than adults, and, in fact, are moving towards automating food preparation altogether.
The fast-food companies make scheduling, wages and skill-building difficult, which makes the industry prime territory for union organizing by the Service Employees International Union.
What we have now is a formal rule that favors corporations over workers from a government panel established to look out for worker rights.
What the regulation does is to limit the scenarios under which corporations are considered “joint employers” with franchise holders. Corporations like McDonald’s would likely not qualify as a joint employer with its franchisees, making it more difficult for workers at different franchised restaurants to join together to unionize.
As Huffington Post described it, the previous, looser definition of joint employment had infuriated the fast-food industry because it put companies like McDonald’s and Burger King potentially on the hook for labor violations in franchised restaurants.
The joint employer rule extends to any company that may rely on contractors or temporary workers in the modern economy. The new definition is a blow to eliminating confusion over responsibility of who is really the boss — the franchisee or the big fast-food brand, the temp firm or the manufacturer that contracts with it.
To qualify as a joint employer, the board said, a company must “possess and exercise substantial direct and immediate control” over the terms of employment.
Generally, employer groups and Republicans see the regulation as a good thing. Unions and The Fight for $15 issued a statement by Jennifer Berry, a McDonald’s worker in Milwaukee, who said the Trump administration is “doing McDonald’s bidding. But workers like me know who our boss is: McDonald’s.”
The board began a trial in 2015 to determine whether McDonald’s should be considered a joint employee after of complaints filed by workers of retaliation against them over attempts at union organizing. A ruling in that case is still pending.
Installation of a conservative majority at the NLRB has resulted in a number of changes meant to overturn the previous majority’s decisions, as in the case to allow graduate students to unionize. The government also has made it harder for workers to sue in large groups in wage theft cases.
As Huffington Post noted, the board chose to change the joint employment standard through the rule-making process, rather than a decision in a particular case, probably because one Republican member, William Emanuel, was found to have a conflict of interest (detailed by ProPublica) because he law firm had represented a corporation with franchises. Emanuel had not recused himself from any decisions in this area.
The new joint-employer standard determines whether a business is an employer of employees directly employed by another employer altogether. If two entities are joint employers, both must bargain with the union that represents the jointly employed employees, both are potentially liable for unfair labor practices committed by the other, and both are subject to union picketing or other economic pressure if there is a labor dispute.
In announcing the rule, NLRB Chairman John F. Ring stated, “This final rule gives our joint-employer standard the clarity, stability, and predictability that is essential to any successful labor-management relationship and vital to our national economy.” He added, “With the completion of today’s rule, employers will now have certainty in structuring their business relationships, employees will have a better understanding of their employment circumstances, and unions will have clarity regarding with whom they have a collective-bargaining relationship.”
Coming as Democrats debate just how hard to push back against excesses of capitalism, the rule-making by this group seems extra crispy and timely.