Trump officials justified a new effort to roll back the Obama administration's pro-union "joint employer" rule by arguing that it would have hurt not only businesses but also workers. The Trump administration said the controversial rule would have reduced real income by $11 billion a year.

The Labor Department announced Sunday that it was formally replacing the Obama rule, which said that businesses could be held liable for workplaces at another business if they had "indirect control" over the latter. The administration restored the pre-Obama standard, which said liability only applied in cases of direct control, and added further clarification.

"When we lift the heavy hand of government and allow businesses to create jobs, enter new markets, and compete at lower prices, every American wins," wrote Labor Secretary Eugene Scalia and acting White House chief of staff Mick Mulvaney in a Wall Street Journal op-ed. Citing the White House Council of Economic Advisers, they stated that the Obama-era rules imposed annual net costs of $5 billion and reduced incomes by $11 billion.

The Obama rule was controversial, and the business community lobbied hard to have it rolled back. Critics argued it would cause many corporations to pull out of franchising altogether rather than risk the additional legal liability.

“This resolution provides much-needed clarity for the 733,000 franchise establishments across America and returns to the traditional standard of business that has fundamentally supported and encouraged franchise entrepreneurship for decades," said Robert Cresanti, president of the International Franchise Association.

Unions and pro-labor activists scorned the move, arguing that it only protects corporations. "New Trump rule will make it easier for companies to cheat workers and get away with it," tweeted the National Employment Law Project.