During a Senate hearing Wednesday, Republican Sen. Lamar Alexander challenged a federal labor official over what appears to be a multiple-agency secret attack on the franchise model.
The National Labor Relations Board (NLRB) has recently made efforts to expand a critical franchising rule known as the joint-employer standard. Critics have warned the rule change is just an attempt to help unions by undermining the franchise model. Leaked information has prompted concern among Republicans that the NLRB has been secretly working with the Occupational Safety and Health Administration (OSHA) in its efforts.
“I am suspicious that they made the decision one day and this was leaked the day before from OSHA,” Alexander said during the hearing. “It looks like a coordinated effort to change the law.”
Alexander, the chairman of the Senate committee on labor, has been an adamant critic of the NLRB. During the hearing, he questioned Department of Labor Senior Adviser Mary Beth Maxwell. The department oversees OSHA. Maxwell denied OSHA and the NLRB working together on the matter.
The leaked information first appeared in a memo, which was obtained by Politico. The memo detailed a proposal from OSHA to get involved in investigating whether companies are joint-employers. Currently OSHA, which handles health and safety, doesn’t investigate such areas of labor law. Its mission in that regard has remained the same since the 1970s.
“The Obama administration is apparently determined to use every facet of government to ensure that the SEIU gets access to hundreds of millions of dollars in new funding for their pet liberal causes,” Natalie Gillam, deputy communications director for AR Squared, a nonprofit affiliate of the Republican super PAC American Rising, said in a statement to The Daily Caller News Foundation. “Including even using OSHA to attack successful small businesses.”
The joint-employer standard has been around for decades. Republicans and business groups argue efforts to expand the rule are unprecedented and harmful. The standard establishes which company has responsibility over employees when multiple companies contract with one another.
Franchising is a unique form of contracting. It allows a small business to contract with a large corporation, like McDonald’s, so that it can to use its brand name and sell its products. Though the small company has to accept its own risk, it gets to run its business the way it wants. This while having the backing of a well-known brand and products.
The problem is when a corporate brand name gets declared a joint-employer with a small business, it must accept responsibility for the actions of that operation. Business groups argue this will likely result in corporations being less likely to participate in the franchise model or asserting more control over the small businesses they contract with.
Since announcing its interest in revisiting the standard last year, many lawmakers and business leaders became immediately concerned. The NLRB has defended the potential changes. It argued in the McDonald’s case that franchisors often times have too much control over the independent franchisees they contract with for them to be consider their own operations.
OSHA and the NLRB did not respond to requests for comment from TheDCNF.
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