Biden’s National Labor Relations Board must relish the chaos they are sowing for employers by pulling at every level possible to broaden paths to union organizing. The end effect is a procedural maze, particularly when it comes to the recent Cemex decision that now sees its first test in the food service industry. As we discuss below, this industry is also reeling from twin blows to franchises.
Cemex in action: Workers at an NYC fast-casual cafe chain, Hex & Co., provided managers with notice that they wish to unionize with Workers United, the infamous Starbucks-tackling leg of the SEIU. The new Cemex protocol requires companies to recognize workers’ demands for union recognition or file an RM petition.
Thus, Hex has two weeks to voluntarily recognize the union or petition the NLRB for an election. However, the NLRB now has authority to bypass the results of a vote if the board decides that any unfair labor practice claims against the company hold water.
At present, Hex workers – from baristas to bartenders and those who run the chain’s board-game events – are asking for a $22.50 minimum wage and increased staffing.
Minimum wage is soaring elsewhere: Yep, those coasts are not clear; Uber, Grubhub, and DoorDash lost their bid to block an $18 minimum wage for workers of app-based food-delivery companies in NYC. That wage kicks into effect immediately, and workers will see a further increase to $20 minimum wage in 2025.
Meanwhile, in California, fast food workers will receive substantial boosts in minimum wage after over a year of false starts and pauses. They won’t quite receive the $22 per hour that AB 257 would have dictated when Gov. Newsom signed that bill last September at the behest of SEIU. Yet these workers will, per a compromise and the tweaking of another bill, AB 1228, receive at least $20 per hour beginning in April 2024.
This month, Newsom signed AB 1228 into law. In doing so, he greenlit a council to make recommendations for working conditions and further wage increases until January 1, 2029.
AB 1228 applies to restaurant chains with 60+ locations nationally, and franchise owners will bear a disproportionate financial burden. That’s not their only in-process headache.
The lingering joint employer threat: On a nationwide level, McDonald’s is warning that its long-standing franchise model (95% of its locations fall under local ownership and operations) could crumble if the NLRB follows through on broadening the definition of “joint employer.” If this happens, umbrella corporations would face greater liability during labor disputes, allegations of labor law violations, and negotiations with unions.
The board has been making noises about the proposed revision for over a year while suggesting that a final version would surface this summer. That hasn’t happened yet, and it might take another moment or two to occur.
Why? The NLRB might currently be distracted by its own misconduct allegations that are coming to a boil. To paraphrase a certain catchphrase, we do live in interesting labor times.
