Where’s the Beef? McDonald’s, Joint Employers and the NLRB II: What “Labor” Says it Means

Following the NLRB’s announcement on July 29th of its position that McDonald’s and its franchisees are joint employers, commentators across the spectrum have been opining about this actually means for employers, unions and workers.

This week the AFL-CIO weighed in with its opinions in a post on its blog AFL-CIO NOW.  After recounting the background of the developments, in section called “What’s the Big Picture?” the author points out how organized labor intends to take advantage of the Board’s anticipated broadening of the standards for finding joint employer status:

"Even though this story has a long way to go, this is "pretty significant," says AFL-CIO Legal Counsel Sarah Fox. What makes this case so interesting is that the joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other practices companies use to avoid directly employing their workers, such as subcontracting, outsourcing and using temporary employment agencies. "Companies are increasingly using these kinds of arrangement to distance themselves from their workers and shield themselves from liability as employers," says Fox. "These are the devices they use so that they can get the benefit of the work the employees do, but say 'I'm not responsible' for unfair labor practices, health and safety violations, paying proper employment taxes or complying with other legal responsibilities of an employer."

The notion of the joint employer doctrine is an important concept for holding employers responsible, even if there's a third party involved, when they are effectively exerting control over wages and working conditions.

As we have predicted, big labor and the NLRB both see these developments, under the rubric of the “economic realities” theory argued by the Board’s General Counsel in its brief to the Board in Browning-Ferris as calling for a new test for determining joint employer status – one which the AFL-CIO sees as allowing unions and workers to go after the companies that contract with other employers, through subcontracting, outsourcing and using temporary employment agencies,” in an effort to hold the customer responsible for its suppliers’ employment practices.

Expect to see these theories raised with ever increasing frequency in a broadening circle of relationships.