On December 19, 2014, the NLRB Office of General Counsel issued 13 complaints alleging that McDonald’s and its franchisees violated the rights of employees working for franchisees. Key to these complaints is the opinion of the Office of General Counsel that McDonald’s and its franchisees are “joint employers” of the employees of franchisees. At its core, the Office of General Counsel is moving to eviscerate the current standard for a finding of “joint employer,” specifically that the employer must meaningfully affect matters relating to employment relationship such as hiring, firing, discipline, supervision and direction. Instead, the Office of General Counsel wants to replace the well-understood standard of “meaningfully affect” with the, in my opinion, nebulous standard of “sufficient control”–even if that so-called “control” does not include power or authority of the franchisor to hire, fire, discipline or supervise a franchisee’s employees.
Make no mistake. The NLRB’s decision to issue complaints against McDonald’s, claiming it is a joint employer with its franchisees, is a direct, existential threat to the future of franchising. Not franchising “as we know it”, but to franchising period. As regular readers of this blog know, we have been intently following the actions of the NLRB. For further reading, I highly recommend an ALERT written by some of my colleagues regarding this very serious matter.