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NLRB pushes ahead on joint employer cases

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in Employment Law,Human Resources

The National Labor Relations Board is moving forward with plans to pursue complaints against McDonald’s franchisees—with the fast food chain’s parent company named as a joint employer.

A Dec. 19 statement from the NLRB’s Office of the General Counsel said it found merit in 78 unfair labor practices charges filed against various McDonald’s franchise holders and McDonald’s USA.

That means McDonald’s USA could be found liable for any illegal employment practices committed by its franchisees. Franchise agreements typically insulate parent companies from liability for the illegal acts of their franchisees.

The outcome of the McDonald’s cases could reverberate far beyond franchise businesses. “The General Counsel’s announcement that a franchisor will face liability for the actions of its franchisees will affect decades of established law and business relationships,” said Littler Mendelson partner Michael Lotito.

The NLRB charges allege that McDonald’s and its franchisees are equally liable for “discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity.”

McDonald’s workers filed the charges last year in the wake of protests demanding higher pay, better benefits and greater control over working hours. They contend they were subjected to “threats, surveillance, interrogations” and other forms of retaliation for participating in the protests.

Litigation will begin in March with trials before administrative law judges and—regardless of out-come—probably continuing to federal appeals courts.

A McDonald’s statement said the company will fight the charges, which it contends “improperly and dramatically strike at the heart of the franchise system—a system that creates economic opportunity, jobs and income for thousands of business owners and their employees across the country.”

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