On July 29, 2014, the National Labor Relations Board (“NLRB”) issued a brief statement that could turn labor law in the world of franchising upside down. The NLRB’s General Counsel stated that it plans to go forward with a number of complaints that allege unfair labor practice claims against a McDonald’s franchisee as well as the franchisor, McDonald’s USA, LLC. The NLRB’s position appears to be that the franchisor and franchisee may be “joint employers” of the burger flippers and other employees of a franchisee due to the control that a franchisor imposes on its franchisees.
Under past precedent, the franchisor generally has not been held liable for labor or employment practices of its franchisee unless it maintains the right to control the operations of the franchisee, a test analogous to determining whether a worker is deemed an employee or an independent contractor. Past case law has generally held that in a traditional franchisor franchisee relationship, the franchisor will not be deemed a joint employer and is not responsible for wage and hour violations or other alleged labor and employment violations committed by the franchisee. See, e.g., Singh v. 7-Eleven Inc., in which a federal district court held that 7-Eleven corporate franchisor did not share employment responsibility with its franchisees. Similarly, in a Title VII discrimination case, another district court held that the franchisor was not a joint employer for Title VII purposes because the franchisee “exclusively possessed the rights and responsibilities regarding all employment matters and the day-to-day operations in his store, and his relationship with the plaintiff as his employee.”
Originally published on Law.com on August 12, 2014.
Please see full article below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.
Topics: Employee Rights, Franchises, Franchisors, Joint Employers, McDonalds, NLRA, NLRB, Unfair Labor Practices
Published In: Franchise Updates, Labor & Employment Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© JAMS, The Resolution Experts | Attorney Advertising