NLRB issues complaints against McDonald's as joint employe

"The federal government's complaint makes clear that fast-food companies like McDonald's can’t have it both ways — it can’t exercise such pervasive control over a workplace and effectively dictate wages and working conditions while still saying that it’s not the employer," said Catherine Fisk, Professor of Law at the University of California, Irvine School of Law. "The NLRB general counsel’s complaint reflects the general counsel’s determination that evidence shows that McDonald's exercises so much control over the operation of individual franchise restaurants that it is a joint employer with the franchise operator."

www.qsrweb.com
December 22, 2014

NLRB issues complaints against McDonald's as joint employer

The National Labor Relations Board filed 13 complaints Friday against McDonald's in response to 78 alleged instances claiming its franchisees violated federal labor laws. The decision signifies that the parent company is, indeed, a joint employer alongside its 2,500 owner/operators, and could therefore be responsible for wage violations and other allegations brought forth by employees of those franchised locations.

The charges of wage theft and other violations were filed in NLRB regional offices in Manhattan, Philadelphia, Detroit, Atlanta, Chicago, St. Louis, Kansas City, New Orleans, Minneapolis, San Francisco, Indianapolis, Phoenix and Los Angeles. At the moment, they are allegations that the NLRB has decided deserve further investigation by an administrative law jaw.

"These complaints are not determinations or rulings on the facts of the cases," McDonald's said in a statement released Friday.

The move follows NLRB's initial rejection in July of McDonald's stance that it is not directly responsible for its franchisees' business.

The NLRB's general counsel found last week that the company "wields such extensive influence over the business operations of its franchisees that individual franchise operators have little autonomy in setting or controlling workplace conditions."

McDonald’s, for all intents and purposes, is the boss, the complaint concludes.

In March, McDonald’s workers in three states filed class-action lawsuits against the company, alleging widespread wage theft. There have been more than 180 cases filed with the NLRB involving McDonald's since November 2012.

The issue has caused divisiveness within the restaurant industry. Pro labor groups claim McDonald's is the boss and is therefore responsible for allegations about illegal working conditions at its franchised restaurants.

"The federal government's complaint makes clear that fast-food companies like McDonald's can’t have it both ways — it can’t exercise such pervasive control over a workplace and effectively dictate wages and working conditions while still saying that it’s not the employer," said Catherine Fisk, Professor of Law at the University of California, Irvine School of Law. "The NLRB general counsel’s complaint reflects the general counsel’s determination that evidence shows that McDonald's exercises so much control over the operation of individual franchise restaurants that it is a joint employer with the franchise operator."

"… If you work at McDonald’s, then you work for McDonald’s, and not just the company’s franchisees. McDonald’s exerts substantial control over its franchised restaurants; it's only right that the company should also be held responsible for the rights of workers at its restaurants," added Catherine Ruckelshaus, general counsel of the National Employment Law Project.

Fight not over
However, McDonald's, as well as other franchised companies and organizations such as the National Restaurant Association and International Franchise Association, have argued that franchisees themselves are responsible for the day-to-day business, including wages and working conditions.

The International Franchise Association warned that the decision, should it become permanent, would negatively impact small businesses across the country.

"The board has effectively legislated a change to the definition of who an employer is, which will impact hundreds of thousands of businesses. IFA will vigorously challenge what the NLRB has done today in the interest of preserving the balance of power between our branches of government to reverse this in the name of job preservation, economic expansion, the rule of law and sound public policy," said Robert Cresanti, IFA's VP of Government Relations and Public Policy. "IFA will lead that charge and we are confident in its ultimate outcome to preserve the franchise model."

Patrick Semmens, VP of the National Right to Work Foundation, called the NLRB "radical" and claimed union officials are behind the decision in an effort to get more dues-paying workers.

McDonald's statement stated that the NLRB's actions "improperly and dramatically strike at the heart of the franchise system." The company said it will contest the joint-employer allegation, as well as the unfair labor practice charges in the proper forums. The company's independent owner/operators are also expected to contest the ULP charges.

McDonald's also claims it is the target of a union-financed campaign.

"McDonald’s has taken the appropriate measures, working properly with its independent franchisees, to defend itself against that attack on its business. McDonald’s serves its 2,500 independent franchisees’ interests by protecting and promoting the McDonald’s brand and by providing access to resources related to food quality, customer service, and restaurant management, among other things. These optional resources help entrepreneurs operate successful businesses. This relationship does not establish a joint employer relationship under the law – and decades of case law support that principle," the company said in a statement.

The final resolution of the complaints are expected to undergo a lengthy process, McDonald's said.

Here is the official release about the decision from the NLRB.

http://www.qsrweb.com/news/nlrb-issues-complaints-against-mcdonalds-as-joint-employer/


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