Is Labor Law Putting the Franchise Business Model at Risk? -

Over the course of the last year, we have kept you abreast of National Labor Relations Board (NLRB) case law and Department of Labor (DOL) interpretive/ enforcement guidance, how these agencies are changing their view of the responsibility of parent corporations for the employment relationship between employees of temporary agencies and franchises, and how these changes have the potential to drastically alter the benefits and risks of utilizing these relationships.

In what could become one of the most enlightening applications yet of this emerging shift, an NLRB hearing before an administrative law judge began in mid-March involving allegations by workers that McDonald's is responsible as a joint employer for the alleged labor law violations of its franchisees. The franchisors are alleged to have threatened, disciplined, or fired franchise employees who participated in widely-publicized campaigns for collective bargaining and a $15 minimum wage.