Congress May Give A Big Christmas Gift To McDonald's This Year

Fast food chains don't want to be considered employers under the law. Will Congress grant them their wish?

Republicans in Congress have been trying for months to roll back one of the most liberal reforms to labor law in the Obama era, and they may finally have their opening.

The "joint employer" standard, which the National Labor Relations Board introduced earlier this year, says fast food brands and other franchise-based companies can be deemed joint employers alongside the franchisees that run their restaurants and stores. This could force companies like McDonald's to bargain with workers when labor laws are broken or when workers try to unionize.

Companies that operate on a franchise model are not happy about the new standard, and Republicans in Congress have taken up the cause. They've held a number of hearings blasting the NLRB's move, one of which was unsubtly titled, "Stealing the American Dream of Business Ownership: The Joint Employer Decision."

GOP lawmakers have introduced legislation to block the new standard, but with both parties now wrangling over an omnibus spending bill, Republicans' best shot at scuttling or delaying the reform would be adding a rider to that legislation. Given the pressure to strike a deal to fund the government, it's possible Democrats would reluctantly go along with it.

Rep. Brad Ashford is a Nebraska Democrat who supports blocking the joint employer standard. Ian Lee, a spokesman for Ashford, said the congressman believes a significant number of Democrats would be open to blocking it, too.

"Congressman Ashford has engaged in numerous informal conversations with colleagues on this issue and believes there is a universe of around 50 pro-small business Democrats that potentially would support this legislation," Lee said.

It's probably not McDonald's or Wendy's that Ashford is trying to protect. His district is home to a major elderly care provider called Home Instead Senior Care. Home Instead operates on a franchise model, with more than a thousand locations around the world, according to the company's website.

Even if enough Democrats were willing to accept a rider that goes after the joint employer standard, it isn't clear that the Obama administration would be. White House press secretary Josh Earnest said Wednesday that President Barack Obama would oppose such a measure, though he did not go so far as say it would be a deal-breaker. Earnest said the joint employer issue was perhaps "the best example of Republicans' misplaced priorities."

"[W]e obviously would be opposed to any effort by Republicans in Congress to insert that measure into the budget bill," he said.

With Republicans controlling Congress, Democrats haven't been able to pursue far-reaching labor law reforms. But the NLRB, which enjoys a Democratic majority appointed by Obama, has been issuing rules and decisions more favorable to workers and unions than to employers. The joint employer standard might be the most significant of these moves.

Under the franchise model, it's typically the franchisee who ends up in hot water when laws are broken, as opposed to the company whose name is on the sign out front. That's one reason a fast food giant like McDonald's chooses to franchise roughly 90 percent of its locations to franchisees, rather than operate those restaurants itself -- franchising allows it to shift workplace responsibilities onto someone else. But the joint employer rules threaten to undo that advantage, forcing companies like McDonald's to deal with unions and worker groups in a way they never have before.

In their decision explaining the new rules, the labor board's Democratic majority argued that the law shouldn't serve as a shield for employers.

"It is not the goal of joint-employer law to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace," they wrote. "Such an approach has no basis in the [National Labor Relations] Act or in federal labor policy."

The new policy is already creating huge headaches for McDonald's. The NLRB's general counsel named the company as a joint employer alongside its franchisees in a case alleging widespread union-busting related to the recent fast food strikes. In a court filing, McDonald's accused the labor board of trying to "fundamentally rewrite franchising and joint employment law." The trial for that case is set for January.

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