It was supposed to go into effect next month, but has already been delayed to next February.
“The U.S. Chamber of Commerce and other business groups — including the American Hotel and Lodging Association, the International Franchise Association and the National Retail Federation — sued the NLRB in federal court in Texas last week to block the rule,” reports PBS.
Per the NLRB, “[t]he new rule will meaningfully reduce the time it takes to get from petition to election in contested elections and will expedite the resolution of any post-election litigation.”
“The second key development is a new legal framework that outlines when employers may be required to collectively bargain with employee representatives, notably unions, even when there has not been a representation election in favor of the union,” notes law firm Norton Rose Fulbright.
In addition, the NLRB rule also sets new criteria “for determining when two companies should be considered ‘joint employers’ under the National Labor Relations Act,” (NLRA). In application, this would mean that more companies would be required to be involved in labor negotiations, even in cases of franchises and independent contractors.
As director of the Buffalo Co-Lab at Cornell University’s School of Industrial and Labor Relations Cathy Creighton explains, “It’s trying to take in the realities of today’s workforce, when many employers subcontract out work and say, ‘Oh, we’re not the employer,’”.
After all, “It’s the employer who is really calling the shots and has the money,” said Creighton.
However, others remain critical, including McDonald’s President and CEO Chris Kempczinski, who said, “The franchise business model is a really great American innovation. It’s created wealth for thousands, particularly underrepresented minorities and women.” “This is something we think needs to be supported, not attacked,” added Kempczinski.
Businesses aren’t the only ones pushing back against the new rule. Some Congressional leaders are also opposed. Earlier this week, Louisiana Republican, U.S. Senator Bill Cassidy and ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, wrote a letter to the NLRB accusing the organization of noncompliance with “a required 60-day delay before major rules take effect.”
Democratic West Virginia U.S. Sen. Joe Manchin has joined Sen. Cassidy in challenging the rule, and introduced a resolution that would “overturn the rule. But that resolution would need to pass the Senate and House and be signed by President Joe Biden to take effect.”
The White House has not publicly come out in support of the new rule, though Biden has aligned himself as “the most pro-union president in history.” This new rule did originate with his predecessor President Barack Obama, but was narrowed in scope under President Donald Trump.