NLRB Ruling Could Pave The Way For Fast-Food Unions The National Labor Relations Board ruling says companies that use franchises and contractors will be held responsible for working conditions of employees, even if they don't directly supervise them.

NLRB Ruling Could Pave The Way For Fast-Food Unions

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We are also tracking a major change in labor rules, which took effect yesterday. The judgment by the National Labor Relations Board has big implications for people who work for a company but are not formally employees. They are franchise operators or contract workers. The NLRB says when companies farm out the work, they may not farm out responsibility. They are still accountable for problems in the workplace. NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: If you think about all the businesses that rely on contractors or franchisees, it's a huge segment of the economy - everything from workers in warehouses, in janitorial operations, construction and people who contract through home health care agencies. Yesterday's decision involved recycling firm Browning-Ferris and its staffing contractor. Cathy Ruckelshaus is general counsel for the National Employment Law Project, which advocates on behalf of workers.

CATHY RUCKELSHAUS: Any company that decides to contract out parts of its labor force is going to have to pay attention to this decision and make sure that they're jointly accountable for what's happening in their workplaces.

NOGUCHI: Jointly accountable is the critical concept. It means complaints brought by workers against a contractor or franchisee are also brought against the parent company. Ruckelshaus hopes the decision will force companies to raise working standards across the board by weeding out firms that lowball bids on contracts.

RUCKELSHAUS: Sometimes those companies aren't able to comply with labor standards because their margins are too thin or they're too fly-by-night to be able to comply.

NOGUCHI: The most significant impact is on unions, which have long argued that fast-food chains use franchise agreements to shield themselves from unionization efforts. Now if parent companies are held responsible for the actions of their franchisees, big employers will be forced to negotiate national contracts if their workers decide to unionize. It is a big loss for the business community. Kelly Hastings is a lobbyist with the Society for Human Resource Management.

KELLY HASTINGS: We're disappointed the standard has changed.

NOGUCHI: Her group argued workers already had protections under the previous system and that this new decision will have the effect of requiring more businesses to bargain with labor groups, costing them both time and money. Roger King agrees. He's senior labor counsel for the HR Policy Association.

ROGER KING: It clearly is a major shift in labor law policy in this country.

NOGUCHI: And he argues the change may bring more workers to the table, but that also means unions could face more complex negotiations.

KING: You have employees that'll be brought into a common bargaining relationship that do many different, diverse skills, work different hours and have what I would call a rather wide disparity of interests.

NOGUCHI: Experts say a legal challenge backed by various business groups is likely. But King says if the workers involved in the Browning-Ferris case decide not to be represented by a union, then the business community is, ironically, in a bind.

KING: And there would be no ability to appeal.

NOGUCHI: For procedural reasons, the NLRB's decision would stand, and the business community would have no legal way to challenge it in court. Yuki Noguchi, NPR News, Washington.

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