‘Fight for $15’ Union Sues to Undo Trump-Era Franchise Rule

By Josh Eidelson | September 17, 2021

The union behind the “Fight for $15” movement is suing to overturn a Trump-era rule that makes it harder to hold companies like McDonald’s Corp. and Amazon.com Inc. accountable for violations of franchised or sub-contracted workers’ rights.

In a lawsuit filed Friday in Washington D.C. federal court, the Service Employees International Union challenged the legality of a 2020 National Labor Relations Board regulation that narrowed the definition of a “joint employer.” The designation refers to a company with enough control over workers to be liable if they’re mistreated and obligated to negotiate with them if they unionize, even though the individuals get their paychecks from a different company.

Joint employer liability has been one of the most controversial and closely watched issues facing the labor agency in recent years, as major companies have increasingly been relying on workers officially hired by someone else, like the “temps, vendors and contractors” who in 2018 became the majority of Alphabet Inc.’s global workforce.

The standard had become more worker-friendly under the Obama administration, when Democratic labor board appointees established a broader definition of joint employer.

Under President Donald Trump, Republicans worked to reverse the precedent, initially with a ruling that was invalidated over an ethics violation and later via regulatory rule-making authority. The labor board’s Republican majority said last year that having control over workers doesn’t make a company a joint employer unless it meets narrower criteria, such as setting their specific pay rates.

In its federal court complaint, the SEIU said that regulation is “arbitrary and capricious,” disregards the significance of corporations’ control over safety conditions, and is inconsistent with the National Labor Relations Act, which the labor board exists to enforce.

“The final rule betrays the act’s fundamental promise by empowering large, highly organized employers to hold control over workers and extract the maximum amount of profit from their labor while unilaterally opting out of the legal duty to negotiate” over working conditions, the union said in the filing.

In an emailed statement, the union, which has tried to win higher pay and unionization for fast food workers through the “Fight for $15” campaign, cited the need for “essential workers” who labored through the Covid-19 pandemic to be able to negotiate over safety issues.

‘Speaking Out’

“When I put on a McDonald’s uniform, it means I’m working for McDonald’s, period,” Delia Vargas, an employee at a franchised McDonald’s restaurant in Oakland, California, said in the statement. “We know McDonald’s is our boss, and we’ll keep speaking out and fighting for a voice on the job until they take responsibility for keeping us safe.”

A representative for McDonald’s didn’t immediately respond to a request for comment. A spokesperson for the labor relations board didn’t immediately provide comment. The agency last month became controlled by Democrats again, following confirmation of President Joe Biden’s nominees.

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