August 1, 2014
Tuesday’s Wall Street Journal has this piece on a recent NLRB decision that makes franchisors “joint employers” in labor complaints for franchised restaurants.
Although the decision from the NLRB General Counsel directly impacts McDonalds only, the McDonalds Corporation sees the decision as having far-ranging implications, according to its official response: “this decision changes the rules for thousands of small businesses, and goes against decades of established law regarding the franchise model in the U.S.”
The decision comes as the franchised restaurant industry is the target of labor organizing campaigns and legislative efforts to dramatically increase the minimum wage.
From Forbes: “The NLRB general counsel has just issued a ruling that the various separate claims can be treated together and that McDonald’s is a joint employer. Legally this is akin to turning the franchise owners into corporate co-managers and all the restaurant workers into employees of corporate headquarters in addition to their local small businesses.”
This decision may in fact result in dramatic changes to the fast food and other segments of the restaurant industry, but could well have far-reaching impact upon franchisors other sectors of the economy as well. Stay tuned for further developments.