Eugene Scalia was sworn in as the Secretary of Labor on September 30, 2019; he has wasted little time in fulfilling an anti-worker agenda at DOL on behalf of the President who campaigned as the friend of labor. VoxFairfax had previously outlined some of the professional highlights of the Justice’s son last year (“A Brawler for the War on Workers,” 08/18/2019, https://wp.me/p9wDCF-8b; and “Orcas Beyond the Rule of Law,” 07/01//2019, https://wp.me/p9wDCF-zn).
Among the most pressing issues for labor is the definition of an employee, especially in California and in light of the growth of the gig economy, particularly as it affects ride-hailing services such as Uber and Lyft. While the drivers seek employee status, giving them benefits, the employers see them as independent contractors to whom benefits need not be paid. In addition, for years, employers, especially franchise corporations such as McDonald’s, Chick-Fil-A, and the 733,000 franchises across the nation employing thousands of workers, have felt threatened by labor rules that permitted local franchise employees to mount lawsuits that could reach the parent companies as joint employers.
In effect, the local franchisee might violate minimum wage or overtime rules but generally the parent company was insulated from any liability. That is, until the Obama administration formulated a set of rules based upon “economic realities” to determine whether the parent was a joint employer for purposes of legal responsibility in labor law claims. According to a statement by the Secretary, “This final rule furthers President Trump’s government-wide effort to address regulations that hinder the American economy, and to promote economic growth.”
The NLRB rule will make it more difficult for employees of local franchises to seek court intervention for claims of anti-union conduct.
The new rule goes into effect in March and is similar to one proposed by the National Labor Relations Board in 2018 following creation of a majority favorable to the administration. The NLRB rule will make it more difficult for employees of local franchises to seek court intervention for claims of anti-union conduct. Under the Obama administration, a joint employer was determined, in part, where it exercised indirect control over franchise employees, while the new rule required “substantial” control.
This distinction between employee and contractor, between franchiser and franchisee, may seen quaint, in-the-weeds. But its importance is huge. Such distinctions govern pay and working conditions for millions of Americans in low-paying jobs.
Overturning Obama accomplishments or policies occupies a significant amount of political effort in this White House and creates curiosity as to what office of whom in the West Wing is keeping score. With the assassination of Qasem Soleimani now under questionable rationale, it was as though the hoorah in the White House was that this feat was more important than getting Osama Bin Laden.
The track record of these “beat Obama” events is growing: destruction of the Affordable Care Act, the nuclear treaty with Iran, rollback of environmental protections. The record also contains the “blame Obama” items such as providing the funds for Iran to support terrorist activities (funds that belonged to Iran to begin with), and poor economic and jobs growth. As has been pointed out, Obama is indeed living rent-free inside Trump’s head.
It was not difficult to predict the likely outcome of Eugene Scalia’s mission at DOL. Given time, we may witness, as we hinted, his revenge upon the victors in the Orca dispute.