WSJ: NLRB Overturns Obama-Era Ruling on Jointly Employed Workers


The National Labor Relations Board overturned an Obama-era ruling that potentially made it easier for contractors and workers at franchised businesses to form unions and collectively bargain with big corporations.

The board, which is now controlled by Republicans, reversed itself on the 2015 case known as Browning-Ferris Industries.

Browning-Ferris concerned a recycling center staffed by contractors. The original ruling found the contractors were jointly employed by a staffing firm and Browning Ferris. The case was appealed and remains pending in federal court. Had the workers been found by the court to be jointly employed, it could have allowed them to organize and seek collective bargaining with the large waste-management company.

The case was thought to have implications for McDonald’s, Subway and other brands with many franchised locations, making it easier for workers at franchises to organize into unions.

The latest NLRB ruling found that workers could only be recognized as employees when a firm had direct control over workers, making it harder for contractors or those at franchises to organize.

Overturning Browning-Ferris was widely expected after President Donald Trump this year appointed two additional Republicans to the board, giving his party control of the agency that oversees union-employer disputes. Those new members joined Republican Chairman Philip Miscimarra in overturning the 2015 ruling. The board’s two Democrats voted against Thursday’s decision.

Mr. Miscimarra plans to leave the board after this week, when his term expires. After he departs, the board will again be split along party lines until a replacement is confirmed by the Senate.

Business groups welcomed Thursday’s ruling.

“The NLRB’s decision is a tremendous win for common sense,” said Randy Johnson, senior vice president at the U.S. Chamber of Commerce.

International Franchise Association’s Matt Haller said the Browning-Ferris standard caused “needless confusion and uncertainty for America’s 733,000 franchise businesses.”

But a leading Democrat criticized the decision.

“The board took a giant step backward and gave corporations a blank check to ignore their bargaining responsibilities to workers under federal law,” said Sen. Patty Murray (D., Wash.), ranking member on the Senate’s labor committee.

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