Last month, I noted a good move by the Labor Department to reverse a decision it had made under President Obama. It involves the question of how to deal with labor violations at franchise businesses, such as fast-food restaurants:
Traditionally, in the case of franchises, individual restaurants and the like [as opposed to the central franchising companies, such as McDonald’s itself] were usually considered the workers’ employers. But in 2015 and 2016, via actions from the National Labor Relations Board and the Department of Labor, the Obama administration drastically increased the chance that a franchisor would be considered a “joint employer” of workers hired by franchisees. . . . This meant businesses such as McDonald’s could be held liable for their franchisees’ labor violations. . . .
As you can imagine, the Trump administration is working to roll this back. Its Department of Labor (DOL) rescinded Obama’s “guidance” document regarding joint employers back in 2017, and now the department has finalized an update to the underlying regulations — which have not been meaningfully revised in more than half a century, don’t reflect key court decisions, and don’t even speak to some of the issues most relevant in franchise cases. . . . The National Labor Relations Board is expected to have a big announcement about its treatment of joint employers soon too.
Well, that NLRB announcement has now arrived, and the board unsurprisingly took the same approach as the Labor Department: The Obama rule is dead, and the previous rule resurrected, with some tweaks and clarifications. Good riddance to a bad policy.
Well, at least until the Democrats control the executive branch again, at which point they can change it back, in the never-ending ping-pong game brought to you by the National Labor Relations Act.