A federal judge appointed by former President Donald Trump delivered a big win for business lobbies on Friday by shooting down a new federal rule that could make it easier for fast-food and other workers to organize.
U.S. District Judge J. Campbell Barker of the Eastern District of Texas issued an order vacating what’s known as the National Labor Relations Board’s “joint-employer” rule, saying the agency went too far in issuing it. Employers groups had filed a lawsuit in hopes of blocking the regulation from taking effect.
The joint-employer rule would make it easier for workers and unions to hold big companies like McDonald’s responsible for unfair labor practices involving their franchisees or subcontractors, or even to force those companies to the bargaining table. The rule is a top priority for the Democratic majority at the NLRB, which oversees union elections and referees collective-bargaining disputes.
“The rule would make it easier for workers to argue that a company like McDonald’s is the one setting the working conditions, not just the no-name franchisee who signs the paychecks.”
Unions and businesses have tussled for years over whether fast-food chains and other companies that use subcontractors should be considered “joint employers” under the law. Labor advocates say the franchise and contracting arrangements just help powerful companies skirt their obligations to workers, foisting them off onto franchisees and other smaller businesses.
The NLRB’s proposed rule would make it easier for workers to argue that a company like McDonald’s is the one setting the working conditions, not just the no-name franchisee who signs the paychecks.
Lauren McFerran, the NLRB’s chair, said in a statement that the agency was weighing its next steps given the order.
“The District Court’s decision to vacate the board’s rule is a disappointing setback, but is not the last word on our efforts to return our joint-employer standard to the common law principles that have been endorsed by other courts,” said McFerran, an appointee of President Joe Biden. “The agency is reviewing the decision and actively considering next steps in this case.”
The U.S. Chamber of Commerce called the order a “major win.”
“It will prevent businesses from facing new liabilities related to workplaces they don’t control, and workers they don’t actually employ,” the lobby said in a statement.
Business groups and Republicans often choose to challenge progressive reforms in Texas federal court, where the conservative makeup of the bench makes their legal efforts more likely to succeed. The NLRB could appeal Barker’s decision to the U.S. Court of Appeals for the Fifth Circuit, which has a reputation for being extremely conservative.
However, there is a separate lawsuit related to the joint-employer rule currently before the U.S. Court of Appeals for the District of Columbia Circuit. That lawsuit was brought by the Service Employees International Union in a possible attempt to put the litigation in a more union-friendly venue.
“Trump's appointments to the federal bench have tilted the judiciary in a more conservative direction.”
The SEIU and other unions have tried for years to broaden the legal reading of who can be considered a “joint employer.” The SEIU-backed Fight for $15 campaign, which led strikes throughout the fast-food industry, argued that brand-name companies like Wendy’s and Burger King control the working conditions inside franchised restaurants and should be held accountable when workers’ rights are violated.
Republicans and business groups have also tried to block the joint-employer rule legislatively, by using a law known as the Congressional Review Act, which enables Congress to overturn new federal regulations. One of the leaders of that effort is the soon-to-retire centrist Democrat Joe Manchin (W.Va.), who told HuffPost in October that he was strongly opposed to the rule.
“It basically just destroys the entrepreneurial spirit, the capitalist spirit, everything that we are as Americans,” Manchin said.
But even if the legislation to block the rule passed Congress it would still face a veto from Biden, making federal court a more likely path to success for employer groups.
Trump nominated Barker to the Texas seat in January 2019, and the Senate’s then-GOP majority narrowly confirmed him, 51-47, that May. He was part of a huge crop of Trump judge appointments who have tilted the federal judiciary in a more conservative direction in recent years.
Barker previously made headlines in February 2021 when he issued an order striking down the Centers for Disease Control and Prevention’s moratorium on evictions due to the COVID-19 pandemic.