McDonald’s Case is Test for New Joint Employer Standard

Originally published by Thomas J. Crane.

McDonald’s hamburger chain is facing the first test of a new approach to franchise workers. The new approach started with a NLRB decision last Summer that found in certain cases, the parent franchisor could be responsible for employment decisions made by the franchisee. See my comment about that decision here.

The McDonald’s case started when some McDonald’s workers walked off the job to rally for higher wages. The NLRB received many complaints after workers suffered reprisal for their labor activity. The NLRB will hold hearings about McDonald’s workers in New York City and later in Chicago and Los Angeles. The NLRB has not explained why it believes this is a joint employer situation. But, lawyers representing individual claimants point to the larger corporation monitoring and deciding working conditions of workers. See Chicago Tribune report.

If that is all the evidence the NLRB has, that may not be enough. In the BFI Industries case that established this new standard, there was more evidence of control by the larger corporation. That case concerned a supposed independent contractor, Leadpoint, and a client employer. BFI was the larger, client employer. In that case, BFI had an agreement with Leadpoint that in effect allowed BFI to “codetermine” employment decisions. Leadpoint conducted its operations on BFI property surrounded by BFI personnel. BFI set the conditions of work that determined which Leadpoint workers would stay and who would be fired. Under the agreement, BFI retained authority to “discontinue” any of Leadpoint’s employees. There were two instances in which BFI did indeed discontinue two Leadpoint workers. See my prior post about that decision.

Joint employer under the BFI decision does not mean franchisees and franchisors are automatically joint employers. First, there must e evidence that the parent or larger corporation actually exercises some control over employees of the franchisee. As they teach us in first year of law school, its all about the evidence.

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