Legal Ease
NLRB McDonald’s Ruling Could Have Wide-Ranging Impact
By Richard D. Alaniz W ith the recent decision
that McDonald’s and its franchisees could be
joint employers, the National Labor Relations Board’s general counsel has continued a series of far-reaching actions that could upend how many American companies conduct business. It could also potentially allow unions greater access into industries than they currently have. On July 29, the National Labor
Relations Board Office of the General Counsel
announced that it had
investigated 181 charges against McDonald’s franchisees and the parent company McDonald’s, USA, LLC about violations in the context of employee rights protests. In a groundbreaking decision, Griffin found both the franchisees and the franchisor could be potentially liable together. This determination could dramatically affect not just McDonald’s, but any business that runs franchises by finding that both franchisor and franchisees share liability for employment decisions made at the franchisee level. McDonald’s USA has vowed to
fight the decision. “McDonald’s serves its 3,000 independent franchisees’ in- terests by protecting and promoting the McDonald’s brand and by provid- ing access to resources related to food quality, customer service and restaurant management, among other things, that help them run successful businesses,” said Heather Smedstad, senior
vice
president human resources, McDon- ald’s USA, in a statement. “This rela- tionship does not establish a joint em- ployer relationship under the law. This decision to allow unfair labor practice complaints to allege that McDonald’s is a joint employer with its franchisees is wrong. McDonald’s will contest this al- legation in the appropriate forum.”
52 ❘ October 2014 ® While a final ruling on the case
may be far off, companies should understand how the determination could impact them. Beyond the McDonald’s case, they should prepare now for the NLRB to continue its recent expansion into non-union and non-traditional workspaces.
Union Activity Spurs Initial Complaints
According to media reports, the
complaints filed against McDonald’s started when fast-food employees waged a series of strikes in support of a $15 minimum wage. The strikes targeted McDonald’s and other restau- rants. A decision that McDonald’s is a joint employer could have a profound impact on union organizing activities across any industry that involves fran- chises. For example, rather than focus- ing efforts on 3,000 separate McDon- ald’s franchises, unions may be able to target the parent company with orga- nizing activities. While Griffin’s determination is sig-
nificant, it does not carry the weight of an NLRB ruling. If McDonald’s doesn’t agree to a settlement, the next step will be hearings before administrative law judges about the employees’ claims in the various regional offices of the NLRB. If the administrative law judges find that unfair labor practices took place and that McDonald’s is a joint employer, McDonald’s can appeal. The appeal would take place before the NLRB. Mc- Donald’s could appeal any unfavorable rulings to the federal courts, and ulti- mately the U.S. Supreme Court.
Changes, Questions at the NLRB The general counsel’s determina-
tion comes at a time when the NLRB
is being seen as becoming more pro- union, even as the U.S. Supreme Court has called many of its decisions into question. The general counsel’s latest ac- tions against McDonald’s are part of an ongoing attempt to broaden the defi- nition of joint employer. The NLRB is also weighing a potentially far-reach- ing decision in Browning-Ferris In- dustries of California, Inc., et al. In a friend of the court brief filed in that case, Griffin called for a new, broader definition of the joint employer status. The determination also comes at a
time when the validity of many of the NLRB’s recent decisions has come un- der fire by the U.S. Supreme Court. In June, the nation’s highest court issued a unanimous ruling in Noel Canning v. NLRB that found that the recess ap- pointments of three of the five NLRB members, made in January 2012, were unconstitutional. Griffin himself was one of the recess appointments that the Supreme Court ruled against. Before being sworn in as general counsel of the NLRB on Nov. 4, 2013, for a four-year term, he was an NLRB board member from January 2012 until soon after the Noel Canning decision, during the summer of 2013. Griffin has a long history with unions. Before joining the NLRB, he was general counsel for the International Union of Operating Engineers and also served on the board of directors for the AFL-CIO Lawyers Coordinating Committee.
Next Steps If the NLRB ultimately upholds
Griffin’s determination, the effects could be far-ranging not just for those in the fast-food business, but for fran- chisors in other industries. Even com-
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