Dive Brief:
- McDonald’s Corp., the world's largest fast food chain, engaged in a fight with the National Labor Relations Board (NLRB) to preserve a long-term understanding in the industry that fast-food companies don’t employ the staff of franchisees. In other words, they are not corporateMcDonald's employees, according to a report at Bloomberg.com.
- At stake, according to Bloomberg, is the categorizatin of hundreds of thousands of franchise workers.
- In 2014, the NLRB determined that McDonald’s indeed must share responsibility with franchise owners for managing all employees. If the claims make it through a jury trial, the impact will be major, not just on McDonald's but on all companies that do business via franchises. In this specific case, workers were allegedly fired or suspended at 29 McDonald's locations in five states for their involvement in protests and a bid to unionize, say court records.
Dive Insight:
The NLRB “hopes to fundamentally rewrite franchising and joint employment law,” McDonald’s said in a Monday court filing. If the finding passes legal muster, “McDonald’s, for the first time ever, would be deemed a joint employer of hundreds of thousands of people employed by its franchisees.”
“McDonald’s told the franchisees how to respond to the unionization campaign,” which is “evidence of a joint-employer relationship,” NLRB attorney Rachel Vanessa See said last week in court.
The dispute started after the Service Employees International Union “flooded McDonald’s franchisees with garden-variety unfair labor practice charges,” the company said in court papers. “These charges are unremarkable but for the SEIU’s argument that McDonald’s is a joint employer of its franchisees’ employees.”
This case is a potential bombshell for HR departments should the NLRB position hold up.
