Obama to Destroy Franchise Business in America

Because of a 3-vote majority of Democrats, on a small panel of five federal bureaucrats that make up the National Labor Relations Board (NLRB), contracted labor and franchise operations may have been forever changed; assuming their ruling doesn't get contested in the courts and is left to stand.  If left in place, it will not be for the better.

The ruling is the "Joint-Employer" rule.  Simply, if an employer hires a subcontractor or sells a franchise, and in doing so, exerts so much power over that subcontractor or franchisee that work rules effecting quality, number of positions, uniformity of work being done, or the fact the employee must wear uniforms with the joint-employers name, then that employer is now said to be an adjunct employer.   Thus, even though the joint-employer has no say in the hiring, firing, salary and benefits of a subcontractor's or franchisee's employees, he, as joint-employer, is responsible for them just as if they were his own.

Because of this ruling, a union can drag the joint-employer into unionization negotiations by organizing at the local franchise or subcontractor level.  Therefore, if 60 employees at a single franchise operation at a McDonald's in Topeka, Kansas want to unionize, McDonald's must join in the process by allowing all its employees at corporate-owned McDonald's restaurants and its franchise operations to vote on unionization.  Also, they  will only have less than 21-days to react to a unionization vote request.  This, thanks to another NLRB ruling this year that is not so affectionately called the "Ambush Election Rule" which reduced the number of days to react to a unionization vote from nearly two months to just under 21 days.

So, because of 3 pro-union, unelected Obama appointees, the franchise and subcontracting business models have literally been destroyed.  Understand this, McDonald's and other franchise operations will be put into constant turmoil until a union or unions get their way. For example, even if the Topeka example (above) yields a no vote on unionization, what's to stop them from focusing in on another store in some other city; and again, forcing another vote in 21 days.  The unions won't stop until McDonald's finally cries uncle and decides to unionize on its own. Essentially, this makes contract business owner and franchise owners outsiders.

Simply, this ruling will do what unionization has always done: destroy jobs and businesses in this country; and in cities like Detroit. That's because unions don't help businesses but, instead destroy them through excessively increasing wages and benefits that you and I as consumers can't afford.  And, in order to get their way they will always use the threat of a nationwide strike.  The unions think they're in the drivers seat on this one because, this time, their business adversaries can't just break the back of the union by moving their manufacturing operations to China or somewhere else.  In the case of franchisees and subcontractors, their businesses are local and can't avoid union wages by moving  overseas.  The one thing they can do is just go out of business.

Ask yourself a simple question: Why would anyone want to buy a franchise and put up with union rules, wages, and benefits?  First, the startup costs just got a lot higher.  Secondly, who would want to deal with arbitration rules and the potential of a local strike when trying to fire someone in a business that is so small it can ill afford being short even one employee during the arbitration process.

References:

Labor Board Ruling Eases Way for Fast-Food Unions’ Efforts: http://www.nytimes.com/2015/08/28/business/labor-board-says-franchise-workers-can-bargain-with-parent-company.html

NLRB Ruling On Franchises: A Power Grab: http://www.nationalreview.com/article/423261/nlrb-franchise-decision

 NLRB’s New “Ambush Election" Rules Go Into Effect: Is Your Organization Ready?: http://www.ogletreedeakins.com/shared-content/content/articles/publications/articles/nlrbs-new-ambush-election-rules-go-into-effect-is-your-organization-ready-2015-04-14

How This New Government Ruling Destroys the Franchise Business Model: http://dailysignal.com/2015/08/28/how-this-new-government-ruling-destroys-the-franchise-business-model/