Biden vows veto if Congress moves to repeal NLRB rule on contract, franchise workers
January 9, 202412:12 PM EST Updated 4 hours ago
The seal of the National Labor Relations Board (NLRB) is seen at their headquarters in Washington, D.C., U.S., May 14,
Summary
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Nixing rule would interfere with workers’ rights, White House says
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House vote scheduled for this week
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Critics say rule will complicate bargaining, upend franchising
Jan 8 (Reuters) – President Joe Biden will veto an attempt to repeal a U.S. labor board rule requiring companies to bargain with unions representing some franchise and contract workers if it passes Congress, the White House said on Monday.
The resolution, which is slated for a vote in the U.S. House of Representatives later this week, would interfere with workers’ rights to bargain for better working conditions, the White House Office of Management and Budget said in a statement.
The National Labor Relations Board rule, which takes effect in February, would treat companies as “joint employers” of contract and franchise workers when they have control over key working conditions such as pay, scheduling, discipline and supervision, even if that control is indirect or not exercised.
The rule replaced a Trump-era regulation requiring companies to have “direct and immediate” control over workers in order to be considered joint employers, which was favored by business groups.
“Reversing this rulemaking will prevent workers from exercising their right to bargain for higher wages, better benefits, and safer working conditions,” the OMB said on Monday. “Too often, companies deny workers this right by hiding behind subcontractors, staffing agencies, and temporary agencies.”
The House Committee on Education and the Workforce approved the resolution for a vote last month. The federal Congressional Review Act allows Congress to repeal agency rules within 60 days of their adoption.
The resolution only needs the support of a majority in the House and Senate to pass, but would require a two-thirds majority to overcome a Biden veto.
Critics of the NLRB rule, including many Republicans and most major business groups, have said it would be improper to force companies to the bargaining table when they have little control over working conditions.
And groups representing franchise businesses claim it could upend the franchise model by requiring companies such as McDonald’s to bargain with the employees of franchisees.
Michael Layman, senior vice president at the International Franchise Association, said on Monday that by curbing franchising, the NLRB rule will have the greatest negative impact on small businesses.
“For those policymakers who know the reality that joint employer threatens franchise businesses, they know it will also lead to worse outcomes for workers,” Layman said.
The U.S. Chamber of Commerce and other business groups filed a lawsuit in November seeking to block the rule from taking effect.
The board in adopting the rule, which is supported by unions and worker advocates, said it was necessary to ensure that businesses that effectively exercise control over workers’ terms of employment respect their bargaining obligations.
