Republican leaders in the Senate challenged an alleged multiple-agency secret attack on the franchise model, according to a letter sent Tuesday to Secretary of Labor Thomas Perez.
Republican Senators Lamar Alexander, James Lankford and Ron Johnson sent the letter in response to a leaked document from the Occupational Safety and Health Administration (OSHA). Based on the document, the agency appears to be poised to secretly work with other federal agencies to undermine the franchise model.
“This would be a significant change in policy,” the letter, obtained by The Daily Caller News Foundation, states. “OSHA’s long-standing multi-employer enforcement policies do not contemplate such a broad definition of who can be held liable for health and safety violations.”
The National Labor Relations Board (NLRB) has recently made efforts to expand a critical business contracting rule known as the joint-employer standard. The rule is used often in franchising, but it can apply to many other businesses. Leaked information has prompted concern among Republicans that the NLRB has been secretly working with OSHA in its efforts. The issue was first raised Sept. 23 during a Senate hearing. OSHA falls under the Department of Labor (DOL).
“DOL’s draft guidance instructs OSHA investigators to ask for information that does not appear to be related to health and safety,” the letter continued. “For example, the guidance asks for information about franchisor fees, the creation of menus, the approval of signage, and whether suppliers are recommended, among many other things.”
The joint–employer standard is pivotal to franchising and contracting. Franchises in essence are multiple, sole businesses that contract with a central corporation. Under the National Labor Relations Act, two or more companies that contract with one another can be considered a single employer. The standard is determined by how much control one company has over the employees of another. McDonald’s is just one of a few cases that have allowed the NLRB to revisit the standard. The other cases involve CNN and Browning-Ferris Industries.
“The leaked document also raises questions about whether DOL and the National Labor Relations Board (NLRB) have a coordinated effort underway to change joint employer laws,” the letter also noted. “Indeed, the day after OSHA’s draft guidance was leaked, the NLRB announced its Browning-Ferris decision.”
The Browning-Ferris decision showed the NLRB is determined to use the new standard in cases. The NLRB has defended the changes saying franchisors oftentimes have too much control over the independent franchisees for them to be considered their own independent operations.
“OSHA frequently develops internal documents to provide information for its inspectors,” OSHA said in a statement to TheDCNF. “The document in question included information meant to help OSHA inspectors determine who is responsible for worker health and safety at a particular business where there may be a joint employer relationship.”
Critics claim the change to the joint-employer rule is nothing more than an attempt to benefit unions. Under the previous standard, unions would have to organize employees at each individual company within a single franchise as opposed to organizing all employees at once within the same franchise.
“For more than 10 years, the case law under the OSH Act has explicitly recognized that the concept of joint employment applies,” OSHA went onto say. “There are many different work arrangements, including temporary workers, subcontractors, and franchising arrangements, that could be considered joint employers. The chief concern of these questions, as with everything that OSHA does, is protecting the lives and wellbeing of American workers.”
The standard has traditionally been considered based on direct and immediate control. The control could be over wages, benefits and other employment factors. The change makes it so the standard is determined in a more case-by-case basis and allows the NLRB to declare joint–employer status for reasons not previously considered. For instance control factors that go beyond just employment.
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.
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