By Laura Perdew
The National Labor Relations Board (NLRB) Office of the General Counsel announced on July 29 that it authorized complaints against 43 McDonald’s franchisees for violating employees’ rights during worker protests that occurred around the country demanding a “living wage.”
Moreover, NLRB also authorized complaints against the franchisor, McDonald’s, USA, LLC, and held that McDonald’s could be held jointly liable for actions by its franchise operators.
This is a departure that could have a significant impact on the normal franchisor/franchisee business model. Usually, the franchisor licenses its trademark and sets some standards relating to products and quality but the franchisee is solely responsible for all employment decisions—hiring, firing, supervising, discipline, etc.
Franchisors are typically not liable as joint employers unless they exert substantial control over the franchisee’s day-to-day operations.
Several business groups, including the U.S. Chamber of Commerce, the National Restaurant Association and the National Retail Federation, issued statements criticizing the NLRB’s announcement.
“This Memorandum has broad implications and appears to undermine settled law defining who is the employer under the National Labor Relations Act,” said Randy Johnson, the U.S. Chamber’s senior vice president for labor, immigration and employee benefits. “This upends existing law and is part of a larger agenda at the NLRB to overturn …read more
Source: Fullerton Chamber of Commerce