In a separate case, the NLRB has filed complaints against McDonald's claiming it was the joint employer of franchise workers across the country.
"Frankly, it's shocking", said Wilma Liebman, a former Democratic appointee on the board who once served as its chairwoman.
The National Labor Relations Board, in a 3-2 decision involving Raytheon Network Centric Systems, issued a ruling today affecting bargaining obligations that are required before implementing a unilateral "change" in employment matters.
Employer groups had been agitating to undo the standard that was set under President Barack Obama nearly from the moment it was decided, and they applauded the decision.
The restaurant association said in a statement that Thursday's decision "restores years of established law and brings back clarity for restaurants and small businesses across the country". "The Browning-Ferris decision in 2015 made the standard for joint employment so broad and vague that an employer could be held liable for the labor and employment practices of independent contractors and subcontractors over which they have no direct control". "The 2015 Browning-Ferris ruling stacked the deck against small businesses and inserted uncertainty into day to day operations". Essentially, the test no longer mandated that employer control be direct or immediate; a showing of indirect or subsidiary control over working conditions would suffice.
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The reversal could have important implications for the ability of workers to win concessions from employers through collective bargaining. The Board's decision in Hy-Brand is consistent with Board Chairman Philip Miscimarra's dissent in Browning-Ferris.
"In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity's employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine", the NLRB said in a statement. A company is free to fire a contractor or end a franchise arrangement if it suspects that workers are on the verge of unionizing.
The board said the companies were joint employers of several workers who were unlawfully fired for going on strike. "While AAHOA applauds today's decision, we will continue our efforts to pursue a change to the law so that the joint employer definition is statutory and can not be changed arbitrarily by the next administration without Congressional approval".
In its ruling on Thursday, the board said the earlier decision had prevented the NLRB from "discharging one of its primary responsibilities ... which is to foster stability in labor-management relations".
Noam Scheiber is a New York Times writer.