The National Labor Relations Board (NLRB) issued a proposal Thursday that would overturn an Obama-era interpretation of the joint-employer standard that has troubled franchisers for years.
The NLRB is responsible for mediating disputes between workers and employers and enforcing labor laws. It also oversees certain union processes, such as elections.
The board overturned three decades of precedent in 2014 and broadened the definition of a “joint-employer” to include any business or employer that shared “direct or indirect” control over employees. The expanded definition largely affected franchisers, making them liable for labor violations committed by individual franchisees. (RELATED: A Pro-Union Labor Board Ruling Is An ‘Industry-Wide’ Drag On Hotel Employees’ Wages, Study Says)
“The NLRB’s proposed rule seeks to restore longstanding principles on what establishes a joint employer relationship, which rightly center around direct and substantive control over work conditions of another business,” Competitive Enterprise Institute labor policy analyst Trey Kovacs said in a statement.
“The proposed new standard will create greater certainty for businesses, which will allow employers to plan for the future and be confident in knowing what kinds of business-to-business arrangements will establish a joint employer relationship,” he continued.
Since the definition of a joint-employer was expanded, corporate franchisors have been rolling back support for franchisees who have purchased the rights to open a business under the brand name, Great Clips franchise owner Jerry Akers told The Daily Caller News Foundation.
Franchisors typically provide guidance to store owners opening a new business. Since 2014, franchisors have been trying to distance themselves from the store owners to evade being classified as a joint-employer, Akers told TheDNCF.
Unions have fought to keep the new definition of a joint-employer, arguing that the new rule allows workers to have a greater say in bargaining. Under the current rule, unions may bargain with the franchisor and franchisee together as joint-employers instead of the just the franchisee.
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