In case you missed it, National Labor Relations Board (NLRB) General Counsel Richard F. Griffin made a pretty significant announcement about McDonald's and its role as an employer to workers in franchise locations all over the country.
Historically McDonald's has claimed it has no authority over wages or complaints of workers' rights violations at its franchise locations because that is up to the individual owners, but the NLRB general counsel determined McDonald's could be liable as a joint employer in these kinds of situations.
There's been a lot of head scratching over what this announcement means and its implications for other large companies and workers at these kind of fast food franchises, so here is some basic information to break it all down for you.
How Did This All Come About?
You've probably noticed that fast food workers all over the country are fed up. In recent years these workers have been speaking out against low pay and working conditions in the fast food industry, culminating in several strikes and days of action that have captured the hearts and minds of people who care about workers' rights. Some workers who spoke out said that their employers retaliated against them, even though such concerted activity is protected by federal labor law. Those workers filed charges of unfair labor practices with the NLRB and presented evidence that McDonald's does indeed have significant control over wages and labor relations at its franchisees. Which brings us to the NLRB McDonald's news.
What Did the NLRB Say?
General Counsel Griffin investigated charges alleging McDonald’s franchisees and their franchisor, McDonald’s, violated the rights of workers as a result of activities surrounding the fast food strikes and protests. He found some of these charges to have merit and, significantly, determined that McDonald's should be considered a joint employer with its franchisees. Basically, McDonald's wouldn't be able to hide behind the franchisee, but also may be held responsible for the policies in place that deal with terms and conditions of employment, and labor practices.
What Happens Next?
If the workers and the employers cannot come to a settlement, the NLRB general counsel will issue complaints and try the cases before administrative law judges. Those judges then make rulings and the losing parties can appeal to the full NLRB board in Washington, D.C. NLRB decisions could be appealed to a federal appeals court, and then possibly to the Supreme Court.
Will All Franchisors Be Considered Joint Employers Now?
Not necessarily. This case is specific to McDonald's. That being said, this could have implications for other employers on a case-by-case basis if more unfair labor practice charges come up.
What's the Big Picture?
Even though this story has a long way to go, this is "pretty significant," says AFL-CIO Legal Counsel Sarah Fox. What makes this case so interesting is that the joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other practices companies use to avoid directly employing their workers, such as subcontracting, outsourcing and using temporary employment agencies. "Companies are increasingly using these kinds of arrangement to distance themselves from their workers and shield themselves from liability as employers," says Fox. "These are the devices they use so that they can get the benefit of the work the employees do, but say 'I'm not responsible' for unfair labor practices, health and safety violations, paying proper employment taxes or complying with other legal responsibilities of an employer."
The notion of the joint employer doctrine is an important concept for holding employers responsible, even if there's a third party involved, when they are effectively exerting control over wages and working conditions.