The National Labor Relations Board has sought to enforce subpoenas against McDonald’s after filing 13 complaints against the franchisor alleging that it is a joint employer of employees of its franchisees, a determination that could erode the traditional legal distinction between franchisors and franchisees. McDonald’s is alleged to have retaliated against employees of its franchisees who protested working conditions and sought higher wages. Traditionally, “joint employer” status could only be found where a franchisor exerted sufficient control over conditions of employment, such as determinations on wages, hiring, and firing. However, in a case issued in August 2015, the NLRB broadened the test for joint employer status, concluding that the status existed where unrelated employers of the same employees “share or codetermine those matters governing the essential terms and conditions of employment.” Under the new standard, joint employer status is determined based on a totality of circumstances in each particular case. The NLRB’s subpoenas are addressed to email communications and other documents of the McDonald’s executives who had direct contact with franchisees. To date, McDonald’s has expended more than $1 million in its effort to avoid a determination of joint employer status.
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