Unions, franchise owners, and the latest in anti-market efforts

Bill McMorris of the Washington Free Beacon documents recent developments in a major labor union’s attacks on fast-food franchise owners.

The SEIU has long targeted franchise establishments for unionization. However, the business model provides numerous obstacles for organizers: the workforce is often young and mobile and franchisees are generally small businessmen who pay fees to corporate to operate under the corporate brand, forcing unions to organize on a store-by-store basis.

The union has waged a multi-million dollar campaign over the last several years to gin up a workers movement in the fast food industry through its Fight for 15 campaign. The movement claims to represent the interest of workers by demanding a $15 hourly wage.

Critics claim this is an astroturf operation, pointing out the lack of attendance from actual fast food employees, as well as the roughly $20 million the union has invested in workers organizing committees across the country in 2014 alone.

Aloysius Hogan, a labor policy expert at the free-market think tank Competitive Enterprise Institute, said the FTC complaint represents a new direction for the campaign. Rather than trying to turn workers against their employers, it seeks to turn franchisees against their parent companies.

“Today’s set of allegations against franchisors is aimed at weakening the franchise business model—the ability to set the terms of franchise agreements and requirements,” Hogan said in a statement. “Already, in another action aimed purely at increasing labor union power, union special interests have pending legal action against franchisors to make them and franchisees jointly liable for employment-related policies. Thousands of small businesses and jobs are at risk.”

The FTC did not respond to request for comment.

[International Franchise Association president Steve] Caldeira pointed to a recent survey that found the majority of franchisees are happy with their arrangements and questioned whether the union actually had the interests of small business leaders in mind when it filed the petition.

“The SEIU’s petition amounts to nothing more than asking the FTC to develop a solution for a problem that doesn’t exist,” Caldeira said. “Franchisees are highly satisfied, they have a high level of trust in their franchisors.”