December 22, 2014

National Labor Relations Board “Shatters” Wall Between Franchises And Parent Companies

According to the Quad City Times, last Friday the National Labor Relations Board (NLRB) “issued 13 complaints against McDonald’s and some of its franchisees, calling them joint employers and alleging they violated labor rights of employees at various restaurants nationwide.” 

Beyond the actual violations at hand, why are these citations important? Because in holding the McDonald’s corporation liable for what happens at individual locations the NLRB has expanded its long-standing definition of employer to include the parent company of franchise locations. Indeed, as University of Illinois at Chicago labor and employment relations professor Robert Bruno explained, the ruling “shatters the wall that has kept franchisees and franchisers separate.” International Franchise Association Executive Vice President Robert Cresanti said, “This is the nightmare before Christmas … It is a devastating blow to this industry.” 

In October, Connecting the Dots explored how an expanded definition of “employer” could eventually impact all employers. Specifically, we warned an expanded definition could eventually include subcontractors. Read the full story from October here