Tuesday, July 29, 2014

McDonald's Liable for Franchise ULPs?

McDonald'sUPDATE: Harris Freeman and Patrick Kavanagh wrote to remind me that in April, the NLRB invited briefing on whether to alter its current joint-employer standard.  The GC's action in the McDonald's case could be part of the move in Browning-Ferris. (Harris' amicus brief on the case is here.) 

 

Richard Griffin, the NLRB's General Counsel, has decided to pursue unfair labor practice charges against both McDonald's and several of its franchise owners.  The ULPs allege retaliation--such as firings and other punishments--because of employees' labor activities.  But the headline issue is that the GC has determined that McDonald's is a joint employer, along with the franchise owners.  The is a big deal for corporate McDonald's, as the vast majority of restaurants are franchise owned, meaning that McDonald's will have to take more of a central role in monitoring restaurants' workplace practices.  In turn, it would give labor organizations more opportunity to pressure McDonald's for improvements or possibly organize bigger units.

According to the GC's news release:

The National Labor Relations Board Office of the General Counsel has had 181 cases involving McDonald’s filed since November 2012.  Of those cases, 68 were found to have no merit.  64 cases are currently pending investigation and 43 cases have been found to have merit.  In the 43 cases where complaint has been authorized, McDonald’s franchisees and/or McDonald’s, USA, LLC will be named as a respondent if parties are unable to reach settlement. 

Until we see evidence from both sides, it's hard to take a position on the joint employer issue.  But this is an interesting development on the heels of Harris v. Quinn.  I was just noting at a Supreme Court review this morning that the biggest impact of Harris may be the joint employment issue.  In that case, the Supreme Court avoided the union agency clause question by finding a lack of joint employment status.  There were arguments on both sides of that issue, but I expect courts to use Harris to narrow corporate liability under the joint employer classification.  It's possible we'll see this in  McDonald's if the case ends up in court.

Speaking of developments in this case, I feel obligated to make a note for non-labor law readers, especially after all the Boeing craziness a few years ago:  the NLRB has not decided anything here.  All that has happened is that the GC has decided to pursue a case against McDonalg's and some franchise owners (it's comparable to a district attorney filing charges in a criminal case).  If there's no settlement, the case will first go to an administrative law judge and, after the ALJ decision, the case will go to the NLRB.

Hat Tip: Patrick Kavanagh

-JH

 

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