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Going After Franchising

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Lydia DePillis has a good profile of David Weil and Richard Griffin, the NLRB appointees seeking to hold companies accountable for their franchisers. This is freaking industry out and they are siccing their dogs on the NLRB, which I expect will be utterly eviscerated and perhaps even eliminated the next time the Republicans control the presidency and Congress simultaneously.

Their harmonious approaches have raised suspicions on Capitol Hill that Griffin and Weil are mounting a coordinated assault on businesses that depend on all forms of subcontracting, a push that has now surfaced at the Occupational Safety and Health Administration and Equal Employment Opportunity Commission. Republicans on the House Education and Workforce Committee demanded to see any correspondence between the two, which they said would be “inappropriate.” And indeed, some evidence of communication between the two agencies was produced, although the Department of Labor says that’s entirely above board.

“Federal agencies can foster a more efficient and effective government by working together to learn best practices and to broaden understanding of topical developments in relevant legal issues,” said a spokesman for the department.

Weil and Griffin’s actions have prompted yelps of protest from a broad range of industries that rely on “fissuring,” as a broad range of contracted work has come to be known. But none has resisted as loudly as the franchise industry, through its trade group the International Franchise Association, which sees the action around joint employment as simply an indication that the administration is following organized labor’s agenda.

“When you have an administration that is pro-union, and appoints people who are pro-union, and you have unions spending a tremendous amount of money, it provides a fertile environment for unions and employment-related causes to take on high visibility,” says Stuart Hershman, a longtime franchise lawyer who advises the IFA.

The problem, Hershman says, is that franchisors don’t know what kinds of assistance they can provide to franchisees without becoming a joint employer. Franchisors are already spending more on lawyers to try to adapt to the new rules, he says, but they fear it won’t be enough. According to Ruckelshaus, of NELP, the number of cases being filed against companies as joint employers is rising as well.

In response, the association has built a grassroots lobbying network to try to push Congress to stop the Department of Labor and NLRB from pursuing franchisors as joint employers of their franchisees’ workers.The trade group has also recently advocated for laws adopted in a handful of states that formally state a franchisor can’t be held responsible for the actions of its employees — that doesn’t protect them from federal law enforcement, but it’s something.

This is great. Appointees like this are we will remember the Obama presidency very fondly in the future, even if we can criticize some aspects of it. Taming the franchising industry, an industry that exists so that corporations can obscure responsibility in an opaque labor system while actually maintaining a significant amount of control, would be a tremendous boon to labor. Let’s hope the next president continues with these policies.

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