An associate general counsel of the National Labor Relations Board told a group on Wednesday that the agency might name McDonald’s before the end of the month as a “joint employer” in a labor complaint filed against franchisees, Politico reported.
But the NLRB quickly countered the assertion, saying it had not yet set a timeline for processing the complaint, the blog site added.
The NLRB had alerted McDonald’s in June of a decision by the Board to hold the franchisor partially responsible for the employment policies and practices of franchisees. But the industry had held out hope that legal arguments from the franchisor community would convince the agency to reverse itself before moving ahead with a final redefinition of McDonald’s responsibilities.
A reclassification of McDonald’s—and, by extension, all restaurant franchisors—as joint employers would make a chain’s headquarters responsible for the hiring, training and management practices of stores owned, staffed and run by franchisees. Currently, employment matters are treated legally as the purview of the franchisees. As independent businesses, they alone are held accountable.
A reversal of that legal tradition would be revolutionary and catastrophic for franchising, according to franchisors and trade groups like the International Franchise Association. They contend that franchisors would have to take an active role in the staffing of franchised stores, and would become a routine target of labor lawsuits because of their deeper pockets.