Worker-friendly rule overturned by NLRB

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When it comes to tipping at restaurants, President Trump wants to give more control to management and not to the servers themselves. Buzz60

The National Labor Relations Board on Thursday overturned a controversial Obama-era rule that held franchisees and other large companies liable for labor law violations by franchisees and subcontractors.

The decision marked the latest move by federal regulators to roll back worker-friendly rules that were passed during the Obama administration and opposed by businesses.

Under the joint employer rule, a company such as McDonald’s could be sued by workers employed by the chain’s franchisees for violating safety or other regulations even though the larger corporation had only indirect control over the employees.

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The rule also could allow striking fast-food workers to negotiate with McDonald’s to form a union rather than with thousands of franchisees across the country. Similarly, temporary workers could sue the owner of a factory for better pay or conditions rather than the staffing agency that technically employs those workers.

The NLRB said Thursday a company would be considered a joint employer only if it had direct control over the workers.

The rule “stacked the deck against small businesses and inserted uncertainty into day-to-day operations,” Cicely Simpson, executive vice president of the National Restaurant Association said in a statement. “Today’s decision restores years of established law and brings back clarity for restaurants and small businesses across the country.”

Earlier this year, the Labor Department  under President Trump rescinded Obama era guidance that held franchise companies as well as franchisees liable for violations such as failing to pay workers the minimum wage or overtime. The broader joint employer standard was also expected to be revoked as Trump filled vacancies on the NLRB in recent months.