Today the NLRB Office of General Counsel authorized complaints against McDonald’s franchisees and determined that McDonald’s USA, LLC, the franchisor, is a “joint employer” of the employees of franchisees.

friesMcDonald’s has been the target of a continued effort by the Service Employees International Union.  Franchisee employees have variously alleged that they were fired for joining labor unions, were underpaid, or had expenses deducted that left them earning less than minimum wage.

According to the Wall Street Journal, McDonald’s said in a memo distributed to franchisees that there is no legal or factual basis for the NLRB’s finding that the employees are joint employees of the franchisor and franchisee and that it will vigorously defend the expected administrative trials and appeal processes likely to follow the complaints.

Today’s shocking–and legally incorrect, if you ask me–decision from the NLRB general counsel could upend the franchise industry, making franchisors responsible for the employment practices of their franchisees even when they do not control those franchisees. If upheld, it also portends more aggressive efforts by unions to organize the employees of the franchise industry. In my opinion, this fight makes all the vicarious liability cases that have come before look tame in comparison.