Fast food workers from across California rallied at the state Capitol in Sacramento, urging lawmakers to pass AB 257. Aug. 16, 2022, Photo by Rahul Lal, CalMatters

Imagine a scenario where Gov. Gavin Newsom steps in to make the right decision, and Pres. Joe Biden comes stumbling in to undo it.

That’s the situation California and really the rest of the country faces as the House of Representatives takes a stand Friday against a new regulation that would upend the franchise industry.

Biden stands with his veto pen at the ready.

Ali Nekumanesh, executive vice president at Fresno sandwich shop franchisor Deli Delicious, penned an oped in The Business Journal Thursday about the National Labor Relations Board’s (NLRB) joint employer rule that would make corporate franchisors equally liable for the employee working conditions of individual franchise owners.

A compromise to avoid that rule is what led to California’s $20 minimum wage for fast food workers that begins April 1.

The NLRB’s own joint employer rule takes effect next month.

Heeding wide disapproval from the business community, the House of Representatives on Friday voted to take down the new rule 206-177.

According to an initial vote count, eight Democrats joined Republicans in passing the resolution opposing the NLRB joint employer rule, including Rep. Jim Costa of Fresno.

Biden has vowed to veto any repeal of the new rule. It would take a two-thirds majority to block that veto.

Nekumanesh breaks down what this new rule will mean. There’s real-world experience to draw from. An attempt at a similar rule from 2015-17 led to job losses, increased operational costs for small businesses and an avalanche of lawsuits before it was struck down.

According to the U.S. Chamber, the rule cost franchise businesses $33 billion per year, resulted in 376,000 lost job opportunities and led to 93% more lawsuits.

For franchisees, this new rule it means government can tell you that a distant corporation you partner with is ultimately responsible for your employees, even though that wasn’t part of the original agreement.

For consumers, it means fewer franchise businesses, thus less options and increased prices at a time when it’s hard enough to get by.

Californians have long paid the price for legislators who do the bidding labor. Now it’s spreading from sea to shining sea.

“The NLRB’s new joint employer rule is the latest in a string of actions to promote unionization at all costs, even when harmful to workers, employers, and our economy,” said Glenn Spencer, senior vice president of the U.S. Chamber of Commerce’s Employment Policy Division, in a Nov. 9, 2023 statement. “It defies common sense to say that businesses can be held liable for workers they don’t employ at workplaces they don’t own or control. The NLRB has been overturning numerous precedents at the behest of labor unions, so the Chamber is suing to rein in this out-of-control agency.”

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Gordon M. Webster Jr. is the publisher of The Business journal.