Trump clears regulations for franchise owners, a significant rollback on Obama restrictions

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Amid a booming economy and falling unemployment, the Trump administration’s efforts to roll back harmful policies enacted under former President Barack Obama got a boost Friday when labor regulators targeted one of the more controversial of these policies.

The National Labor Relations Board may reinstate the long-standing interpretation of the joint-employer standard, which held that parent companies are not liable for labor violations committed by franchisees or subcontractors. The Washington Free Beacon reported.

The Obama administration, in support of Big Labor, did away with the previous interpretation, giving unions an avenue to bargain with big national companies like McDonald’s rather than with locally owned franchisees, according to the online news source.

The agency announced last week it’s considering a proposal that would effectively treat parent companies as uninvolved third parties.

“Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship,” the agency said. “The National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.”

With three Trump-appointed Republican board members and one Democrat member, the proposal’s success looks promising.

And business owners are happy with the “good news,” as the International Franchise Association called the proposed change that is expected to add clarity.

“Franchise owners have been confused about the vague and uncertain legal minefield created by the NLRB joint-employer standard since it was expanded in 2015,” IFA president and CEO Robert Cresanti said in a release, according to the Free Beacon. “Rulemaking is an important step to address the concerns of local business owners by providing the clear lines in the determination of joint-employer status.”

Sen. Lamar Alexander, R., Tenn., chairman of the Senate Committee on Health, Education, Labor, and Pensions, agreed that it was good news for workers and small business owners.

“The Obama administration’s expansion of the ‘joint employer’ standard threatened to destroy the American Dream for owners of a franchise business,” Alexander said. “The NLRB’s new proposed rule would return to the earlier joint employer standard and restore a path to the middle class for small businessmen and women across the country. This is good news for all Americans who value the opportunity to work hard and climb the ladder of success.”

And as the pro-union liberal media noted: “Another piece of Obama labor legacy gone.”

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Tom Tillison

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