Next time you get a burger at McDonald’s look for the union label.
Your local McDonald’s probably isn’t unionized yet, but fast-food unionization is apparently what the National Labor Relations Board (NLRB) would like to see happen. The NLRB recently issued a decision that’s apparently designed to make it much easier for employees who work for franchises to unionize — and perhaps to cast a wider net for low-value lawsuits.
The NLRB wants to categorize some corporations that work on the franchise model as “joint employers.” That means if an employee thinks a local franchise owner is breaking federal rules or regulations, he or she can sue — not just the franchisee, but also the parent corporation. The recategorization also lowers the barrier for unionizing franchise employees.
Why is it a mistake to classify the employees at your local McDonald’s as also being employed by McDonald’s corporate headquarters? National Review explains:
The overwhelming majority of McDonald’s restaurants are franchises, independent businesses ranging from one-shop outfits to very large operations, the owners of which pay a fee to McDonald’s for the use of its name, business model, and supply chain. Your local fry-guy was not hired by McDonald’s, cannot be fired by McDonald’s, is not paid by McDonald’s, and is not supervised by McDonald’s. His terms of employment are not set by McDonald’s but by his employer, the franchise operator. He is not an employee of McDonald’s in any meaningful sense, but the Democrats on the NLRB are not interested in sense — they are interested in power.
The absurdity of this decision has not gone unnoticed by some in Congress. U.S. Senators Tom Cotton and John Boozman recently authored an op-ed in Arkansas Business explaining their opposition to this decision. In their article, they note that this is one in a long line of Obama Administration actions that are little more than giveaways to Big Labor:
Over the last six years, the NLRB has restricted the ability of employers to give workers adequate time and information about union elections, while the Department of Labor has attempted to limit the ability of financial advisers to assist families with investment and retirement decisions. And now, the NLRB threatens to undermine one of the most important small-business models in the country.
Cotton and Boozman are working on legislation that would overturn the franchise ruling. They are also attempting to use the appropriations process to cut off funding for the NLRB to enforce this ruling. Both of these efforts would be good for business owners. They would also be good for workers.
Some may disagree with that last sentence. They may claim that this ruling is pro-worker. After all, doesn’t it give workers more rights? That’s one way to look at it, I guess. I think it’s far more accurate to say that this ruling raises the overall cost of employing someone at a franchise location. If corporations are considered “joint employees” with local franchise owners, you will see pressure from these corporations on franchise owners to limit the number of people they hire. Automation will replace the lowest-skilled workers. The end result will be fewer jobs available to the people who most need them.
The evidence is pretty clear that when you overregulate the labor market (as is the case in much of Europe), it leads to fewer jobs. Unfortunately, the Obama Administration is trying to force European-style rules on America’s businesses and workers. It’s good to see senators like Tom Cotton and John Boozman fighting back against this misguided crusade to harm our economy.