NLRB Weighs In on McDonald’s Labor Dispute

Affirmative ruling would mark the first time a major franchisor would be held responsible for violations at franchisee locations.

March 30, 2015

WASHINGTON – Today a National Labor Relations Board (NLRB) administrative law judge will begin weighing whether McDonald’s Corporation should be responsible for poor working conditions and low pay at its franchise restaurants, writes The Hill.

If the ruling comes out as affirmative, “it would mark the first time that a major franchisor would be found culpable for labor violations at individual chains, following a finding last year by the NLRB’s lead attorney that McDonald’s should be treated as a ‘joint employer,’” writes the news source.

McDonald’s argues it is not a joint employer, contending that independent franchise owners operate the restaurants.  “It’s not going to stop at McDonald’s,” Elizabeth Milito, senior legal counsel of the National Federation of Independent Business (NFIB), told the news source. “This is really an assault on the entire franchise business model."

McDonald’s says the NLRB is “mirroring the union’s position” and targeting the company. “As we have said previously, the National Labor Relations Board’s decision to involve McDonald’s in its actions against our independent franchisees improperly strikes at the heart of the franchise system — a system that creates economic opportunity, jobs and income for thousands of business owners and their employees across the country,” the company said in a statement.

The Hill states that McDonald’s says it does not get involved in the day-to-day operations at franchise restaurants, noting in a statement that the company does not “direct or co-determine the hiring, termination, wages, hours, or any other essential terms and conditions of employment of our franchisees’ employees — which are the well-established criteria governing the definition of a ‘joint employer.’”

In 2014, Richard Griffin, NLRB general counsel, said he would hold McDonald’s corporation jointly responsible for the actions of its franchises. In December, he followed up by issuing 19 complaints against McDonald’s, and the complaints will begin being considered today at hearings in New York, Los Angeles and Chicago, notes the news source.

The resulting decision could then be appealed to the NLRB’s five-member board in a case that would move next to the federal courts and could eventually be decided by the Supreme Court.

“I think all businesses should recognize this is bigger than a McDonald’s problem,” Michael Lotito, an employment and labor attorney and co-chairman of Littler Mendelson's conservative Workplace Policy Institute, told The Hill, adding, “The labor board is embarking on a process that fundamentally redefines who an employer is and who an employee is.”

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