BIG MAC ATTACK : NLRB General Counsel Argues Franchisees and McDonald’s Are Joint Employers

NLRB General Counsel Richard Griffin announced on Tuesday July 29^th   that he has authorized issuance of Unfair Labor Practice Complaints based on 43 of 181 charges pending against McDonald’s, USA, LLC and various of its franchisees, in which the Board will allege that the company and its franchisees are joint-employers. If the General Counsel prevails on his theory that McDonalds is a joint employer with its franchisees, the result would be not only a finding of shared responsibility for unfair labor practices, but could also mean that the franchisor would share in the responsibilities of collective bargaining if unions are successful in organizing franchisors’ workers.  The news, which comes as Fast Food Forward, which is affiliated with the Service Employees International Union (“SEIU”) wraps up its convention in Illinois.

In May of this  this year, General Counsel Griffin signaled his intent to ask the Board to revisit the standards for determining when and in what circumstances two or more employers could be found to be joint employers.  At that time the General Counsel invited the filing of amicus briefs in Browning-Ferris, the General Counsel asked interested parties to share their views on the following questions:

• Should the Board adhere to its existing joint-employer standard or adopt a new standard?
• What considerations should influence the Board’s decision in this regard?
• And If the Board adopts a new standard for determining joint-employer status, what should that standard be?
• If it involves the application of a multifactor test, what factors should be examined? What should be the basis or rationale for such a standard?

While submissions in Browning-Ferris on these questions were to be received by June 26, 2014, it would appear that the General Counsel has reached his decision that a new standard should be adopted and that it should be a much broader one than has been applied in the past.

Under the Board’s practices, the Advice Memorandum issued in the McDonald’s cases has not yet been made available to the public.  While the General Counsel has indicated that absent settlement in the 43 cases that he finds to have merit the Board’s regional directors are directed to issue unfair labor practice complaints and to try the cases before the Board’s Administrative Law Judges, it has been reported that McDonald’s will contest the matters, noting that it does not direct hirings, terminations or the setting of hours and wages by its franchisees and that it has never been found to be a joint employer with them in the past.

Adoption of a new standard for determining whether a joint employer relationship exists between companies in these and other circumstances, such as between companies and those to whom they outsource work and functions could have far broader implications beyond the franchise setting.