American Compass vs AFL-CIO battle isn’t what it appears to be

American Compass and the AFL-CIO apparently disagree on a matter of public policy. American Compass is a nominally right-leaning policy NGO, but funded by the left-wing Hewlett Foundation to divide-and-conquer conservative economic policy for progressivism. So, on the surface, Big Labor skeptics might be tempted to cheer.

But hold the applause, because cynical swamp operator Sean O’Brien, head of the Teamsters Union, lurks in the shadows and his interests are conspicuously aligned with the line American Compass is promoting.

The “American Franchise Act,” legislation that would codify the traditional definition of joint employment but only for some business ventures, splits American Compass from the union federation, which supports the campaign of the SEIU to bind national branding companies as joint employers with local restaurant, hotel, and other business operators.

Joint employment doctrine, briefly

The stakes of the “joint employer” debate are the operations of thousands of independent small businesses and potentially hundreds of millions of dollars in union dues. Allow me to quote myself outlining the traditional rule:

Labor relations doctrine of joint employment has traditionally relied on the principle of “direct supervision” in determining who bears liability for an employee’s workplace situation. In essence, the business responsible for employment was any business that had direct control over an employee’s hiring, firing, wage rates, and job description (known as “essential terms of employment”).

There is a major special-interest group that has a fundamental desire to see that traditional rule changed. No prizes for guessing which special interest group that is:

But for organized labor, going from franchisee to franchisee and organizing store after store is difficult, especially in a business like fast food in which employees come and go at a rapid clip. Better for the SEIU to run its “corporate campaign” playbook against the big national company that does business in a bunch of left-wing jurisdictions and is therefore at least somewhat inclined to play nice and compel it to recognize a union by card check.

[…]

Rather than facing thousands of union lawsuits and unfair labor practices charges of varying levels of merit for the actions of franchisees, the national branding company [under a joint-employer finding] might prefer to cave to the union, conditioning a franchise agreement on a card-check agreement with the union. At the end of the line? Tens, if not hundreds, of millions of dollars in dues and fees for the union.

It is important to note that when I wrote those articles in 2021, the SEIU was not affiliated with the AFL-CIO for complicated internal-union-movement dynamics that I described in my “The Dance of Sweeney and Stern” series. In 2025, facing a second Trump administration that challenged the AFL-CIO and SEIU’s commitment to ever-expanding government employment (and thus union dues) and sought to restrict immigration (threatening one of Big Labor’s chief ideological and recruitment projects of the past quarter-century), the SEIU rejoined the AFL-CIO to help coordinate the new “Resistance.”

Labor Board ping pong

I have joked that the National Labor Relations Board (NLRB) is the most partisan government agency, inclusive of the President’s Cabinet and Congress (and sometimes even the President’s person). By convention (and no other binding policy), the Board (when at full strength) is divided between three members of the President’s party and two members of the opposition party, with members holding staggered terms. (President Trump is currently in litigation over whether he can sack NLRB members before the conclusion of their terms at will.) By practice, the Republican members are usually attorneys with management-side labor-negotiation experience, and the Democratic members are usually lawyers with experience working for labor unions.

These interlocking practices (the presidential majority and the backgrounds and alignments of the members) yield a “ping pong” dynamic for NLRB policy when party control of the executive branch of the federal government changes. Since the turn of the century, the George W. Bush NLRB (I will refer to NLRBs under a presidency as “[President] NLRB” just for simplicity going forward) advanced mostly management-aligned policy, the Obama NLRB overruled a collective 4,559 years of precedents to advance union-aligned policy, the first Trump NLRB reversed many of the Obama NLRB policies, and the Biden NLRB sought to reverse the Trump NLRB policies. Back and forth and back and forth labor-relations policy goes, as the NLRB decides cases and issues regulations in keeping with its rank partisanship and effectively dictated alignment with one set of disputants or the other.

Joint employer has followed this ping-pong pattern (sort of) since the Obama administration. In 2015, the Obama NLRB overturned longstanding precedent to expand who would qualify as a joint employer—exactly what the SEIU needed to make its “Fight for 15” campaign to unionize quick-service restaurants like McDonald’s stick. The first Trump NLRB then reversed the ruling, first with a ruling of its own (later vacated on a technicality) and then with a regulation restoring the pre-Obama rule. The Biden NLRB then issued its own regulation overruling the Trump NLRB regulation in 2023, but that Biden NLRB regulation was blocked by a court ruling and the Biden administration did not pursue appeals, putting the Trump rule back into force.

The franchises’ game

For the International Franchise Association (IFA), the representative trade association for franchised businesses and franchisors, this ping-pong dynamic stinks.

Since presidential elections are effectively coin-flip propositions—since two-faction politics began in 1796, the Jeffersonian-Jacksonian-Democratic faction and Federalist-Anti Jackson-Whig-Republican faction have each won 29 presidential elections—having the very existence of one’s business model hanging on that coin flip is less than ideal. Thus, the IFA has proposed codifying in federal law the pre-2015 definition of joint employment.

Previously, it supported doing so through legislation widely supported across the business community: The Save Local Business Act, which would codify the traditional ‘direct control’ definition of joint employment across the economy. In 2017, the Republican-controlled House of Representatives passed the bill, but it died in the Senate thanks in large part to the super-majority “filibuster” rule, which essentially requires at least nominal cross-party support to pass legislation. (The filibuster rule also blocked Big Labor’s wish-list legislation, the PRO Act, which would have codified the Obama/Biden-era joint employment definition.)

But, thanks to President Trump’s poor approval ratings and the machinations of soft-on-Big-Labor factions in the Republican Party, the Save Local Business Act couldn’t get out of the House in 2026. And it would die in the Senate (that filibuster again) if it did. So IFA has changed its strategy, trying to protect franchise businesses alone, in the hopes that throwing other businesses under the proverbial bus will unlock protections for its members. It’s classical special-interest politics, and exactly how Washington, D.C. got the nickname “the swamp.”

The result is the “American Franchise Act,” legislation that would restore the conventional definition of joint employment for franchise business relationships alone, stipulating that “For the purposes of this Act [the National Labor Relations Act], a franchisor may be considered a joint employer of the employees of a franchisee only if the franchisor possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment of the employees of the franchisee.” Other forms of potentially joint employment arrangements would remain on the NLRB’s ping-pong table.

Is the strategy working? Hard to say, but IFA has made some headway toward a potential super-majority in the Senate by securing co-sponsorship of its Senate legislation from Sen. Angus King (I-ME), who has caucused with Senate Democrats since he entered Congress in 2013. (King’s Maine colleague, moderate Republican and occasional defector from the Taft-Hartley consensus Sen. Susan Collins, also signed on.)

Enter the strange bedfellow

This is where American Compass comes into the debate. American Compass is the think tank funded by the left-wing William and Flora Hewlett Foundation all-but-explicitly to turn the political right into another vehicle to advance left-of-center statist economic policy. Daniel Kishi, a Compass senior policy advisor with extensive work experience in the office of Teamsters boss Sean O’Brien’s favorite Republican, Sen. Josh Hawley (R-MO), put out a policy brief titled “Joint Employer Standard: Restore Responsibility in Fissured Workplaces.”

The language of the title is notable, and evidence of where the Compass faction seeks its policy guidance. David Weil, a leftist academic who served in the Obama administration Department of Labor and saw the Senate reject (on a bipartisan vote) his Biden administration nomination to the same post he had held under Obama, wrote a book in 2014 titled The Fissured Workplace which Kishi lists as recommended “further reading” in his policy brief. Sean Higgins of the Competitive Enterprise Institute describes Weil’s positions:

The trend toward employers hiring contractors instead of traditional employees—that’s what he means by “fissured workplace”—has been an obsession of Weil’s. Most federal regulations regarding workers’ wages, benefits, and collective bargaining do not apply to contractors. Legally, they are considered to be independent businesses. Many companies use contractors heavily or even exclusively, in part because it saves on labor costs. It’s the economic model for most “gig economy” companies. And many workers prefer contract work—“freelancing”—as well since it gives them the freedom to work when they want and not get tied down to one job.

That is extremely frustrating for both unions and regulators because it puts a large section of the workforce out of reach for them. During the Obama years, Weil attempted to fix this by just unilaterally, declaring that all workers were employees. “[A]pplying the economic realities test in view of the expansive definition of ’employ’ under the [Fair Labor Standards] Act, most workers are employees under the FLSA,” DOL announced in a 2015 guidance letter.

Inexplicably (at least on its face) for someone infatuated with Weil’s ‘every job a factory job’ approach to workplace organization, Kishi does not endorse the full PRO Act approach to joint employment, instead promoting the American Franchise Act and arguing that its “standards would give businesses certainty.” More explicably, Kishi further recommended Congress enact a “supplemental ‘fissured workplace test’ under the NLRA and [Fair Labor Standards Act] that would apply heightened scrutiny to the limited set of sectors and arrangements where fissuring is most prominent,” with a target painted on the back of the “third-party logistics” sector—that is, warehousing and transportation.

Enter Big Labor’s Republican-whisperers

Those following closely should be able to put the puzzle together. It is not at all coincidental that the industries American Compass would subject to PRO Act-style rules are targets for organizing by the Teamsters Union. While it will not be confirmed until late March, when the Teamsters national headquarters files its annual reports under the Labor Management Reporting and Disclosure Act, there is public evidence that the union funds American Compass, as it was listed as a presenting sponsor of its 2025 gala.

Franchise businesses like restaurants, hotels, and chain dry-cleaners are not top-level Teamster targets, so offering to spare them is no skin of Compass’s nose, and makes them look like open-minded good-government centrists rather than San Francisco progressives’ camel’s nose under the conservative tent.

The Republican Party itself is not innocent of trysting with the Teamsters, including under its infamous crook of a former leader Jimmy Hoffa (whom the union hails as “a worker’s hero” despite his criminal convictions and Mob ties). The results have been failure and embarrassment (including, allegedly, in the current year). You will forgive me then, for looking American Compass’s apparent gift horse in the mouth.