Dive Brief:
- A Manhattan administrative law judge has granted a request for a stay in a lawsuit alleging that McDonald's is a joint employer with its franchises for National Labor Relations Act (NLRA) purposes, Reuters reports. The trial was expected to end any day, but the judge said the employer and the National Labor Relations Board (NLRB) general counsel should have a chance to pursue a settlement.
- The Service Employees International Union (SEIU) and McDonald's brought complaints to the NLRB and the Board's general counsel, under President Obama, issued a complaint alleging that McDonald's was a joint employer, according to Reuters.
- Since then, however, a President Trump appointee has taken over that position and the Board has reversed it's Obama-era joint employer standard. Reuters reports that the shift may have wiped out some of the claims against McDonald‘s.
Dive Insight:
During the Obama administration, the NLRB expanded its definition of "joint employment," making it easier to hold employers jointly liable in franchise, third-party contractor and other arrangements.
In December, however, President Trump's NLRB overturned the infamous 2015 Browning-Ferris decision and returned to the Board's previous standard. A federal appeals court was set to review that decision but remanded the case to NLRB "in light of new Board precedent."
Still, stakeholders are debating whether that standard and a similar one used for determining Fair Labor Standards Act (FLSA) liability needs updating. The U.S. House of Representatives passed the Save Local Business Act late last year, which would require that an employer have "active, direct" control over a worker's employment to be held jointly liable under either the NLRA or FLSA. The Senate, however, has not taken any action on the bill.
