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Education & Labor Committee Republicans

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NLRB’s Latest Assault on America’s Workplaces

One has to ask what exactly the Obama National Labor Relations Board (NLRB) has against America’s workplaces. In recent years, the NLRB has restricted workers’ access to the secret ballot, advanced a rule that would stifle employer free speech and cripple worker free choice, and tried to dictate where private employers can create jobs.

Now the NLRB has opened a new front in its war on workplaces. The agency’s general counsel, long-time union operative Richard Griffin, issued a decision that would overturn a franchise model in place for years. Education and the Workforce Committee Chairman John Kline (R-MN) described the decision as “detached from reality” and noted:

While the board is considering this very issue, the general counsel is trying to rewrite the franchise model workers, employers, and consumers have known for decades. This is yet another activist decision from the general counsel's office. Big Labor has scored once again at the expense of workers and employers.

Andrew Puzder, chief executive officer of CKE Restaurants, a company that includes iconic names such as Hardee’s and Carl’s Jr., describes what’s at stake for workers and employers:

If the NLRB's new interpretation of the rules—which McDonald's has vowed to contest—becomes the law of the land, it will be tantamount to rewriting an existing contractual relationship by government fiat in ways the parties never contemplated and to their mutual detriment. Franchisers would inevitably pass the costs of jointly managing their franchisees' employees on to their franchisees. Franchisees would find themselves unable to control their labor costs, a key controllable expense and an important element of their profitability.

It's a lose-lose scenario for everyone—except for the labor unions that have long dreamed of organizing restaurant workers nationwide. Even if that dream were realized, though, there would soon be fewer workers to unionize as franchise restaurants began to shut down. The NLRB's attack on the franchise business model is especially unfortunate because franchising plays an integral role in the U.S. economy.

The question is: Who benefits from the NLRB’s new legal invention? The Wall Street Journal has the answer:

This is a bonanza for trial lawyers who will be able to shake down the parent company for alleged labor violations at franchisees whose pockets aren't as deep. The other beneficiary is Big Labor. Workers have long had to petition franchisees to form a union. Under Mr. Griffin's law, they can leap-frog their direct managers to corporate headquarters, which are more vulnerable to political pressure and less sensitive to local markets.

To recap: The NLRB has made a decision that upends decades of legal practice; workers and employers will be harmed by the decision, while labor bosses and trial lawyers stand to benefit. Just another day at the office for the Obama NLRB.

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