In the ongoing saga of corporations versus workers and their various ragtag allies, workers and their allies won a victory recently. A judge on U.S. Court of Appeals for the D.C. Circuit upheld an Obama-issued regulation from the National Relations Board (NLRB) that corporations are responsible for the actions of their subordinate firms.
This has been fought in the courts for three years and known as Browning Ferris after the company in the initial lawsuit that was said to be controlling the conditions of the workers of a secondary company. The Teamsters were seeking to unionize the workers at a recycling plant operated by Browning who had been hired by a temp agency.
Microsoft has been an amicus curiae or friend of the court of Browning Ferris Industries of California Inc. So has the International Franchise Association which lobbies for corporations and the interests of their franchisees. The National Restaurant Association, the lobbying group for restaurants, was also adamantly opposed the rule, as were the National Association of Manufacturers, and the Associated Builders and Contractors who were also amicus curiae.
Many corporations have been outsourcing the majority of their work or business to third party companies and subsequently claim no responsibility over the issues of their franchisees. McDonald’s is a particularly notable case of this. They have claimed they cannot force their subordinate locations to raise wages when pressed by the Fight for 15 and the SEIU which has been seeking to unionize their restaurants.
But McDonald’s is hardly alone in exploiting this loophole in labor law which is need of modernization. Many, many other multinational corporations operate in a similar manner where they wash their hands of the liabilities related to their workforce.
However, late in his administration, President Obama issued a regulation to address the issue which said that the corporate parent and their franchisees were joint employers and thus both liable for their workers. However, corporations and their numerous minions have been fighting this tooth and nail.
A law passed by Congress would have been more effective, but that was not an option at the time due to Republican control of Congress. In fact, House Republicans in the last Congress passed a law that would have done the opposite. Thankfully it stalled in the Senate.
When Trump came to power, he quickly sided with the corporate interests that sought to squash the joint-employer rule, lest it eat into their profits. His subsequent appointees followed suit.
Thus this victory is fairly significant and cause to rejoice for those who do not benefit from corporations forgoing responsibility.
This could make it a lot easier to force corporations to make changes to the numerous locations that bear their name and products that would benefit workers.
For unions and their allies that seek to help workers, fighting franchisees that usually have less than 40 workers, going one by one for hundreds of locations isn’t a good option since each one puts up a massive level of opposition.
Rather, it is far more easier to only organize a few and bring the media to protest of HQ.
Franchisees generally have little latitude over their respective stores. They mostly have to follow orders from HQ that are exceedingly specific. If HQ authorizes a commercial for a special deal, the franchisees have to offer that deal.
Given the nature of how much corporate interests disdain labor and seek total control, this may not be the end of this chapter.