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Proposed NLRB change buoys hopes of protecting restaurant franchisors

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Restaurants’ hopes of tempering a perceived pro-union bias to the National Labor Relations Board were boosted yesterday by President Trump’s nomination of a veteran advocate of employers’ rights for a seat on the regulatory panel.

Nominee William Emanuel is an attorney with Littler Mendelson, a Los Angeles law firm that has represented employers in litigation before the NLRB. In announcing the nomination, the White House described Emanuel’s expertise as “traditional labor law,” a characterization that suggests he does not subscribe to precedent-busting interpretations of labor regulations and rules.

Many restaurant employers would assert that a more radical mindset has clearly been adopted by the NLRB in recent years. They point to such changes as a redefinition of the "joint employer" standard, a guideline that determines what parties are responsible for a business’s labor policies. The NLRB reinterpreted the construct in a way that would reclassify many franchisors as joint employers of franchisees’ employees, a change that could open them to a flood of litigation.

The change raised the possibility of franchisors drastically curtailing the addition of new franchisees to their systems, or possibly discontinuing the practice altogether and growing solely by company development.

Opponents say the redefinition is a thinly disguised effort by the board to make unionization easier. Instead of organizing franchisee by franchisee, union reps could rally support among employees of a whole chain by harping on the employment excesses or irresponsibility of any individual operator.

Emanuel’s nomination is another effort by the Trump administration to add more balance to the NLRB and moderate the federal government’s approach to labor issues. Earlier this month, the U.S. Department of Labor rescinded the definition of the joint employer standard, a huge win for franchisors.

“The National Restaurant Association applauds the selection of William Emanuel as a nominee to the National Labor Relations Board,” Cicely Simpson, the NRA’s EVP of government affairs and policy, said in a statement.  “Given the Board’s broad overreach during the previous administration and harmful decisions on joint employer, ‘ambush elections’ and micro-unions, we welcome the balance and fairness that Mr. Emanuel will bring to the Board.”

“Ambush elections” refers to unionization votes that can be mounted with as little as a few weeks of advance notice to employers. The NRA and other opponents have argued that shortening the ramp-up period to a vote does not leave employers with enough time to make the case to employees of remaining nonunionized.

“Micro-unions” refers to the unionization of employees in groups of just a few individuals. For instance, labor groups have tried to organize a chapter of just two or three bakers in a fast-casual restaurant. 

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