September 15, 2014

The NLRB’s Contribution to Obama’s Anti-Business Crusade

Having written earlier this summer about the whack-a-mole regulatory state running wild under the presidency of Barack Obama, the biggest question in my mind was which of the myriad federal regulatory agencies would be the next to throw a monkey wrench into the economy. It was a foregone conclusion that the EPA would be one of those agencies, and they haven’t disappointed, but the other most egregious offender is the National Labor Relations Board.

The NLRB has issued a ruling that McDonald’s Corporation may be considered a joint employer of McDonald’s franchisees’ workers. If allowed to stand, this ruling will redefine the relationship between franchisors and franchisees by declaring both to be joint employers. This is bad law, bad for business, and bad for employment.

It’s bad law because it would unilaterally abrogate long-accepted contractual arrangements between thousands of franchisors and franchisees. It’s also bad law because it is an insult – no, a repudiation – of representative government. A major change in law that affects so many individuals and businesses is properly the province of Congress. By usurping the legislative prerogative, three unelected political appointees (a majority of the five-person NLRB) are presuming to make a decision that rightly should be made by at least 218 representatives and 50 senators elected by the people.

The NLRB ruling will be immensely disruptive to all the franchisors and franchisees in the country. Indeed, it would destroy the harmony between a franchisor and its franchisees.

Currently, franchisors exert no control over hiring, firing, assigning workers to different shifts, determining the length of those shifts, deciding which worker performs which functions, etc. and if franchisors are now to be deemed joint employers of those who work in each local franchise, they would need to hire additional workers to be on site. You can’t manage a workforce in Peoria or Mesa or Tupelo from Chicago (or, in the case of McDonald’s, Oak Park). How would a franchisor cover these additional costs? They would have to receive a larger percentage of the franchisees’ income. They also might find it expedient to enter into a nationwide bargaining agreement with a union that would represent the workers in all the franchises, figuring that it would be more manageable for them to deal with one collective bargaining agent than having to micromanage labor issues in a large number of franchises.

Franchisees, on the other hand, would find their profit margins squeezed if franchisors had to take a bigger bite out of their revenues. They could try to cover these new costs by raising their prices, but due to the elasticity of demand, this would likely result in a loss of customers. If their employees were unionized and the payroll were to go up, again the profit margins would be squeezed. What had been profitable local businesses employing local citizens could quickly be transformed into unprofitable businesses that have to close.

Clearly, the new NLRB ruling threatens to destroy jobs at a time when the overall job market remains less than robust. As is so often the case, government intervention in the name of helping America’s workers will end up imposing a severe toll on many of those workers.

Why, then, is the NLRB doing this? As I tell my economics students at Grove City College, anytime you want to understand why a law or regulation is adopted, ask the question “Cui bono” – Who benefits? The NLRB ruling may be bad law, bad for business, and bad for workers, but it’s a classic case of special interest politics. It is designed to help labor unions, a key element of President Obama’s power base.

Indeed, the NLRB’s ruling on a joint employer issue is a vivid illustration of bypassing Congress to rule by regulatory fiat. The anti-business, anti-jobs animus of our president has not abated. No wonder corporations want to relocate to other countries.

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!


The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2024 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.