The Obamafolk have just paid off Big Labor with a poisoned plum. The National Labor Relations Board has decided that employees of McDonald’s franchisees are “jointly employed” by McDonald’s parent. So what? You are not excited. Perhaps you should be …
If you were of the few paying attention, you have noted that the Service Employees International Union (SEIU) has (sort of) struck McConald’s for the last couple of years in pursuit of a $15 hr. minimum wage. Most have slept through this. But the SEIU has friends in Washington.
For the union, the problem is that all the McDonald’s franchised stores are privately owned and operated. Every individual franchisee is an independent business that will have to be separately unionized and forced to conform to the union’s demands. A very tall order.
So the kindly NLRB is lending a Federal hand to the union: it has declareed that all McDonald’s franchises’ employees are also “joint employees” (a new legal concept?) of the parent. Voila! the union can organize the entire business by dealing with only the parent! (We suspect that this is a sop to the union for having to put up with the floods of non-union cheap labor being welcomed by the Obamafolk over the now highly porous border.)
Two things to note: One, there are a lot of franchises. McDonald’s of course, many of the fast food ilk but also hardware stores, dollar stores, various services, tax folk and multitudinous others. Franchising is a chunk of the U.S. economy. The economic effect of this casual revolution is not small.
Then there is the legal cesspool resulting. Legal precedent assumes that a franchiser and franchisee are at arm’s length, separate businesses. Prior labor law assumes that a contract between employer and employee is binding. Corporate law assigns liability of corporations. All these seem topsy-turvy with this decision of the bureaucrats. Courts will have to sort it out. That may require a long time, during which large fines will be assessed by the bureaucrats. And who will buy a franchise while this is underway? It is evidence that our governors love unions and hate jobs, from what we see.
Congress could of course, step in. The New York Times linked article above will inform you that one (Democrat) Representative has a bill in Congress addressing it. We will have to see whether the Republicrat uniparty acts or just, as is its wont, sustains the status quo by inaction. The U.S. Census folk say that franchised business is some 10.5% of U.S. Gross Domestic Product (GDP). But what’s that to a politician?
There’s more: If “joint employment” holds up (no bets) what will happen with liability lawsuits? With insurance? With the sometimes enormous fines for labor law violations? etc, etc. Pandora was a piker compare to our NLRB.
So middle class folks who used to invest their retirement in buying a franchise to replace their erstwhile jobs will now have to ponder. But the SEIU is no doubt, happy. Along with a lot of lawyers …