Labor Board Reverses Ruling That Helped Workers Fight Chains
They are likely to continue to push for such legislation for fear
that a future labor board under Democratic control could simply reverse the standard again, and because there are applications of the joint employer concept — as in enforcement of minimum-wage laws — not covered by the labor board’s decision.
Under the Obama-era doctrine, the fast-food corporation could be held liable for labor violations
that occurred at the franchise even if the control it exerted was indirect — for example, if it required the franchisee to use software dictating certain scheduling practices — or if it had the right to exercise control over workers that it nonetheless didn’t exercise.
The key question in determining whether a company, like a fast-food corporation, is a joint employer of workers employed by another
company, like one of the chain’s franchisees, is the degree of control exercised by the corporation over workers at the franchise.
The ruling changes the standard for holding a company responsible for labor law violations
that occur at another company, like a contractor or franchisee, with which it has a relationship.
The board’s ruling on Thursday agreed on both counts, but argued
that the judge had applied the wrong standard — the Obama-era standard — for determining joint employment
The board’s 3-to-2 vote, along party lines, restores the pre-2015 standard, which deemed a fast-food corporation a joint employer only if it exercised direct
and immediate control over workers at the franchise, and in a way that was not limited.
But when, as was more likely under the Obama-era doctrine, a wealthier company employing a contractor or conferring a franchise is considered a joint employer, it must join the bargaining
and could in principle compensate workers more generously.