Listen To The Story

The National Labor Relations Board has overturned a 2015 law that made it easier for contractors and workers at franchised businesses to form unions and collectively bargain with big corporations. 

The 2015 NLRB ruling said contract workers at a recycling center were jointly employed by a third party staffing firm and the business they worked for. Sharon Block was a member of President Obama's NLRB. She's now executive director of the labor and worklife program at Harvard Law School. 

“What the Obama board did was try to apply the proper legal standard, but in a way that fit the way that our economy and our business relationships work today,” she said.

The latest ruling found that workers can only be recognized as employees when a firm has what the NLRB calls, direct control, over workers. A contractor doesn’t fit this new test. 

“Nobody likes to have two bosses," said Matt Haller, spokesperson for the International Franchise Association. "Yesterday’s ruling helps clarify where responsibility lies: direct and immediate control." 

Paul Secunda, labor law professor at Marquette University, said this ruling could limit the ability of workers to collectively bargain. 

“Think about trying to organize a McDonald's store," he said. "You’re organizing 10 employees against a local franchisee, as opposed to organizing tens of thousands or hundreds of thousands of employees against the corporate parent in Illinois. There’s a huge difference.” 

The NLRB has a history of shifting decisions according to which party is in control.


“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.

Follow Andy Uhler at @andy_uhler