Many of us have been watching the ongoing battle taking place in Region 2 of the NLRB as to the consolidated unfair labor practice proceedings that are taking place with respect to McDonalds and various McDonalds’ franchisees. The hearing that was originally scheduled to begin on March 30th of this year has been postponed repeatedly due to ongoing disputes over production of documents pursuant to various subpoenas issued to the franchisees involved. The subpoenaed information related to the joint employer relationship between the franchisees and McDonalds. Apparently, realizing that they were being stonewalled, the NLRB finally filed, in the U.S. District Court for the Southern District of New York, an application for enforcement of the subpoenas. The Court, by Order of November 12, 2015, granted enforcement of the subpoenas citing the fact that the Board had set forth a prima facie case for enforcement and that the defenses put forth by the franchisee respondents failed to establish that enforcement of subpoenas would impose an unfair burden on them, or was otherwise contrary to the Board’s authority to seek such enforcement.
Obviously this finding by the Court makes it clear that parties engaged in franchise agreements need to get their house in order as to the documents relating to their relationship to lessen the potential for a joint employer finding. The Board will do an extensive subpoena request in any such proceedings in an attempt to flush out each and every fact that will support their position that a joint employer relationship exists. Doing battle through subpoena enforcement is simply too late to protect your interests. The time is now to be pro-active and review the documents in question, and to revise, if necessary, so that the potential for a joint employer finding is lessened as much as practical.