On December 14, the National Labor Relations Board (NLRB) overturned a 2015 policy that had made it easier for workers — particularly fast-food workers — to unionize and challenge their employers over unfair labor practices.
The Obama-era standard sprung from a 2013 case involving workers attempting to unionize at a recycling plant in Milpitas, Calif. The recycling company, Browning-Ferris Industries, owned the building but used a small staffing agency called Leadpoint to provide and manage workers. The local Teamsters union was trying to organize the employees, but it didn’t want to merely negotiate with Leadpoint: It wanted Browning-Ferris to be considered a joint employer and party to any labor contract. A regional director determined that Leadpoint was the sole employer, but the Teamsters requested a review, and the NLRB’s general counsel sided with union in a 3-2 vote.
The vote was hailed by unions and labor advocates for making it more difficult for corporations to distance themselves from certain legal violations — and for strengthening the bargaining power of subcontracted gig-economy workers.
The Browning-Ferris decision was also good news for fast-food workers and organizations like Fight for $15. Most fast-food companies use a franchising model, and Browning-Ferris made it easier for workers to hold corporations responsible for wage theft and union busting at individual locations. In 2014, the NLRB’s general counsel had already ruled that the McDonald’s Corporation could be considered a joint employer in various labor cases brought against the company’s franchises. But Browning-Ferris provided an entirely new legal dimension to the proceedings.
The Browning-Ferris decision was predictably criticized by industry groups, which immediately launched an all-out assault on the new rule. International Franchise Association lobbyist Matt Haller declared that the decision was “a knife-to-the throat issue,” pro-business organizations pressured Congress to block its implementation in their subsequent spending bill, and Browning-Ferris Industries challenged the decision in a federal appeals court.
Industry nervousness ended up being alleviated by the surprising election of Donald Trump, who successfully tipped the NLRB back to a Republican majority in September — and has sought to overturn the labor victories which occurred under his predecessor. The Trump administration recently ended Obama’s extension of federal overtime pay, and it’s preparing to eradicate a 2011 rule which protects the tips of wait staff. All of Trump’s NLRB appointees were connected to anti-union policies at their previous positions, but the confirmation process was fast-tracked, and they easily made it through GOP-controlled Senate. In overturning the Browning-Ferris precedent, the board claimed that the 2015 decision was responsible for “upending decades of labor law precedent and probably centuries of precedent in corporate law.”
In a statement, National Employment Law Project executive director Christine Owens called the reversal “just one more example of the Trump Administration favoring corporations over working people.”
“In this economy, employers are increasingly subcontracting out vital parts of their business to other contractors and/or using temporary employment agencies to fill vital positions,” said Owens. “The Browning-Ferris decision recognized that in these arrangements, companies that contract out work may still retain control over the conditions and standards that govern the work and how the workers doing the jobs are treated … the Trump NLRB has decided to let them off the hook.”
While there is no evidence that Trump was directly involved in the case, we do know that one his companies was impacted by the 2015 decision. In May 2016, catering workers at the Trump National Doral golf resort in Florida won a $125,000 settlement after suing for unpaid wages. As a result of the joint-employer liability, the workers were able to hold Trump Miami Resort Management responsible, even though an outside staffing agency had hired them.
It is likely that the Trump administration will soon work to overturn a number of additional Obama-era NLRB decisions. To the surprise of many, the board ended up adapting to the complexities of a changing economy under Obama and forcefully asserted the rights of workers in a number of important votes. Recent NLRB decisions have given graduate students the right to unionize at private universities, increased the bargaining power of workers at charter schools and made it easier for smaller groups of workers to unionize at companies. However, the term of the NLRB’s Republican chairman, Philip A. Miscimarra, ended just days after the board’s vote. Trump will at least have to wait until the Senate confirms his next nominee and reestablishes the Republican majority before he’s able to undo any of these changes.