OMB Director Mick Mulvaney today gave a grim assessment of the NLRB’s recent decision to withdraw its December Hy-brand ruling on joint employment, saying it could spell the “end of the franchising business as we know it.”
Mulvaney, speaking at a Chamber of Commerce event, said he would “look into” the board’s decision to vacate Hy-brand, which reversed the Obama board’s decision in Browning-Ferris Industries. That 2015 decision made it easier to hold businesses liable for labor violations committed by their franchisees and contractors.
The NLRB overturned Browning-Ferris in December, but pulled a 180 this week after an inspector general’s report found that a Trump-appointed NLRB member, William Emanuel, should have recused himself due to a conflict with his former law firm.
“I’m surprised by that and I’ll leave it at that,” Mulvaney said. “For those who don’t follow this, the joint employer rule could be the … end of the franchising business as we know it.”
Mulvaney — who previously owned a strip-mall Mexican food franchise and at one point planned to open additional locations — said he would not want to be held legally responsible for what a franchisee did with a restaurant or other franchise.
Mulvaney didn’t specify what action he’d take, but he might put the Trump administration more aggressively behind a bill, H.R. 3441 (115), that would codify the Hy-brand standard; it cleared the House in November. “I’ll put my OMB hat on for a second and say we’ll look into that,” he said.