New rule favors more unions
It’s made it easier for millions of Americans to unionize, but businesses are pushing back
A new federal rule that goes into effect next month could make it easier for millions of workers to form unions at big companies like McDonald’s. But it’s already facing significant pushback from businesses and some members of Congress.
The rule — announced late last month by the National Labor Relations Board — sets new standards for determining when two companies should be considered “joint employers” under the National Labor Relations Act.
It sounds wonky. But essentially, the rule could widen the number of companies that must participate in labor negotiations alongside their franchisees or independent contractors.
For example, it might require Burger King to bargain with workers even though most of its U.S. restaurants are owned by franchisees. Or it could require Amazon to negotiate with delivery drivers who are employed by independent contractors.
“It’s trying to take in the realities of today’s workforce, when many employers subcontract out work and say, ‘Oh, we’re not the employer,’ ” said Cathy Creighton, director of the Buffalo Co-Lab at Cornell University’s School of Industrial and Labor Relations. “It’s the employer who is really calling the shots and has the money.”
The NLRB says the new rule changes a 2020 rule that made it too easy for joint employers to avoid responsibility to negotiate with workers. The 88-year-old National Labor Relations Act guarantees the right of U.S. workers to form or join unions.
But critics say the new rule is an overreach by the labor-friendly Biden administration that undermines independent business owners. Some — including the American Hotel and Lodging Association — have already sued to block it.
Sens. Joe Manchin, a West Virginia Democrat, and Bill Cassidy, a Louisiana Republican, have introduced a Congressional Review Act resolution that would overturn the rule.
Biden hasn’t said whether he supports the new joint employer rule, but he has cast himself as the most pro-union president in history.
The new rule is set to go into effect Dec. 26. The rule applies only to labor relations. The Department of Labor sets its own joint employment standards for issues like meeting minimum wage requirements.
Still, the new rule could have a major impact. Local franchise owners employ more than 8 million people in the U.S., according to the International Franchise Association. Millions more work for subcontractors or temporary agencies.
John Motta, who owns 32 Dunkin’ locations in New Hampshire and Virginia, said franchisees must meet certain brand standards and use Dunkin’ uniforms and signage. But beyond that, they want to run their businesses independently.
“We don’t want our corporate partners to be telling us, ‘You have to pay this much per hour,’ ” he said.
Michael Kaufman, an attorney who represents companies in labor disputes, said the rule has other potential complications. If a business hires temporary workers through a contractor but then asks the contractor to fire a temporary worker for harassing someone, the new rule might allow the temporary worker to bring unfair labor charges against the business, Kaufman said.