Today the Office of the General Counsel of the National Labor Relations Board (“NLRB”) took its next step in the investigation of labor practices within the McDonald’s franchise system and issued consolidated complaints against McDonald’s franchisees and the franchisor – McDonald’s USA, LLC on the theory that the franchisor is a joint employer with its franchisees. Consistent with General Counsel’s amicus brief in the Browning-Ferris matter that was filed this summer, the focus of the complaints appear to be on the use of technology and tools that allows franchisors insight and potential control over franchisee operations. According to the NLRB website:
“Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of our Act. This finding is further supported by McDonald’s, USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions.”
The NLRB faces an uphill battle in seeking to consider franchisors joint employers with their franchisees. The Browning-Ferris amicus brief signals a desire to revise the joint employer standard under the National Labor Relations Act to a former, more permissive standard than the one currently applied by the NLRB. However, case law applying the old standard has found that franchisors of typical franchise systems are not joint employers with their franchisees. The case law, however, dates back to the late 70s and it appears that the NLRB is trying to look deeper to differentiate the franchise system of old with modern operations.
More information is available on the NLRB website: http://www.nlrb.gov/news-outreach/fact-sheets/mcdonalds-fact-sheet