BY TIMOTHY H. LEE
According to longstanding legal concepts and National Labor Relations Board (NLRB) doctrine, an ’employer’ is defined for purposes of legal liability and union organizing laws as a business that exercises direct control over an employee in question
Joe Biden insists that Donald Trump, whose presidency Americans now consider a success in comparison with Biden’s, poses a dictatorial threat this November.
It isn’t Trump, however, whose administration engaged in widespread social media censorship now under review by the United States Supreme Court.
Nor was It Trump who boasts that he’ll press forward with his scheme to transfer college student loan costs from borrowers to taxpayers, even after the Supreme Court ruled it unconstitutional.
Now, Biden is pressing forward in similarly brazen disregard of Supreme Court precedent and a federal court rebuke with his effort to upend the nation’s employment sector via his “joint employer rule.”
In so doing, Biden is also vetoing a rare bipartisan Congressional resolution opposing his scheme. So much for Biden’s claims to bipartisanship and unity as well.
The term “joint employer rule” may sound unfamiliar to most Americans, but it constitutes an alarming and dangerous deviation from traditional concepts of labor and employment law.
According to longstanding legal concepts and National Labor Relations Board (NLRB) doctrine, an “employer” is defined for purposes of legal liability and union organizing laws as a business that exercises direct control over an employee in question.
In other words, only a business that actually controls the essential terms and conditions of employment like hiring, firing, wages and other working conditions qualifies as an employer for purposes of litigating those conditions or collectively bargaining about them.
For its part, the Supreme Court ruled in Boire v. Greyhound Corp. (1964) that only businesses exercising control over “those matters governing the essential terms and conditions of employment” were subject to collective bargaining obligations. The NLRB followed suit, holding that “there must be a showing that the employer meaningfully affects matters relating to the employment such as hiring, firing, discipline, supervision and direction.”
It would be unfair and illogical to hold otherwise.
The franchise business model illustrates that logic well. Individual franchisees determine whom to hire and fire, applicable wages and disciplinary decisions. In contrast, distant franchisors exercise no everyday control over individual franchisee employees across hundreds or even thousands of locations and differing legal jurisdictions. It therefore makes no sense to impose legal responsibility upon them when they don’t actually control the employees’ everyday conditions of employment.
The Obama administration, however, decided in 2015 to upend decades of established law and impose the so-called “joint employer rule.” As its name suggests, the Obama proposal assisted its trial lawyer and Big Labor supporters by making multiple businesses “jointly” liable for a single group of employees under collective bargaining and employment laws.
That obviously expanded the field of potential targets for trial lawyers and union bosses, and allowed unions to target much deeper pockets without having to actually win elections through more numerous organizing campaigns. With union membership at record lows, they were desperate for ways to reclaim power and funding taken from union members’ wages.
The Trump administration wisely rescinded the Obama joint employer rule, but the hyper-activist Biden administration now seeks to reimpose it.
Fortunately, a bipartisan group in Congress led by Senators Mike Braun (R – Indiana), James Lankford (R – Oklahoma), Joe Manchin (D – West Virginia) and Angus King (I – Maine) demonstrated leadership by objecting. In a sharp correspondence to NLRB Chairman Lauren McFerran, they highlighted the destructive impact the joint employer rule would have on franchisees and small businesses:
In the United States, there are nearly 775,000 franchises that employ 8.2 million workers and provide $800 billion of economic output. This is projected to grown in 2022 to nearly 800,000 franchises employing 8.5 million workers, and outputting $827 billion to the economy. These franchises include over 300 different business categories, such as restaurants, hair care, fitness, tutoring, amusement parks, automotive repair, lodging, childcare, and senior care. By moving forward with this proposed rule, the Board could hurt entrepreneurs that are utilizing the franchise model to own their own businesses. … Businesses should not be liable for entities they do not control.
When Biden’s NLRB nevertheless pressed forward with its proposal, bipartisan majorities in both the Senate and House of Representatives passed a Congressional Review Act resolution overturning the Biden NLRB’s new rule.
Additionally, the U.S. District Court for the Eastern District of Texas blocked the rule in March, holding that, “Treating a general contractor as an employer of a subcontractor runs headlong into the Supreme Court.”
All of that was of little import to Biden, however. This week he vetoed the Congressional resolution and disregarded the judicial rebuke in pursuit of his radical agenda via administrative agency overreach.
Small businesses and the people they employ will pay the highest price, and Biden supporters seeking explanation for his record-low polling numbers and public economic angst could consider this cynical action to resolve their confusion.
