NLRB Aims to Find that McDonald’s Golden Arches Extend to Its Franchisees

Last month, the NLRB’s Office of the General Counsel authorized complaints for unfair labor practices that hold McDonald’s USA jointly liable for labor violations that its franchisees have allegedly committed.  Since November 2012, fast-food workers have filed 181 unfair labor practice charges against McDonald’s.  The General Counsel found that 43 of those charges have merit and authorized complaints; 64 cases are still pending investigation.

Corporate franchisors like McDonald’s and other fast-food chains have argued that they are not joint employers with their franchisees and should not be held liable for the labor violations of their franchisees, citing that they do not set the wages of store employees. 

However, fast-food workers charge that McDonald’s exerts significant control over its franchisees, such as setting cleanliness standards, the number of employees to use by the hour, and even warning franchisees when they pay employees more than the standard wage.  Given this control, the General Counsel found that McDonald’s was a joint employer with its franchisees and should be held jointly liable for labor violations by its franchisees, including terminating or threatening employees because of their union activities.

Finding that McDonald’s is a joint employer with its franchisees is significant for fast-food workers and workers in other industries trying to organize.  For fast-food workers, a more responsive franchisor should help organizing drives and may even help achieve a $15 minimum wage.  This finding by the General Counsel might also reach into other industries where many parent companies use temp agencies and subcontractors to avoid liability. 

On top of this, the NLRB also announced in June that it was considering making changes to the joint-employer standard through rulemaking, which would help unionization efforts.

We will continue to update you on the unfair labor practice charges against McDonald’s and changes to the NLRB’s joint-employer standard. 

By Anthony Tucci | August 13, 2014

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