On the NLRB General Counsel’s Directive That McDonald’s Can Be a “Joint Employer”

Following is a statement from National Employment Law Project Executive Director Christine Owens on a directive from the National Labor Relations Board general counsel to its regional directors regarding complaints filed against McDonald’s Corporation and its franchisees under the National Labor Relations Act.

“The NLRB’s general counsel has appropriately found that McDonald’s can be named as a ‘joint employer’— together with its franchisees—in complaints filed by workers alleging workplace violations in its franchised restaurants.

“With real control should come real responsibility and accountability. After a close examination, the general counsel has apparently determined that the level of control McDonald’s Corporation exerts over the operations of its franchise restaurants is sufficient to make McDonald’s an employer in law and fact.

“This is what McDonald’s control looks like. For instance, the corporate giant charges high rents and royalty fees and imposes take-it-or-leave-it franchise agreements that require, among other things, that franchisees install company-supplied software to track sales, inventory, and labor costs. These tight controls and oversight make it difficult for franchisees to operate profitably.

“When companies like McDonald’s intervene to such an extent in franchised operations, they should be held accountable, along with their franchisees, for practices that violate the law.

“Corporate lobbyists will no doubt raise the alarm that this means the end of franchising. That’s far from the truth. This ruling simply means that corporations that exercise sufficient control over franchised operations cannot feign ignorance or disclaim responsibility for franchisees’ illegal acts, especially when those acts flow from the business model the lead company imposes.”

Contact:
Emma Stieglitz
emmas@berlinrosen.com
(646) 200-5307


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