With the continued strength of franchising in the hospitality sector and the ever growing reliance on vendors and subcontractors to perform many functions in distribution, maintenance, asset protection and other functions that hospitality employers historically performed with their own employees, creating different levels of integration and affiliation between hospitality entities among providers and their various service providers and contractors, the issue of joint-employer status has become a prominent issue of concern. As the NLRB moves towards a broader definition of joint employer status, the NLRB’s General Counsel’s position in a series of cases involving McDonald’s and numerous franchisees across the country appears to foreshadow the NLRB’s new, more aggressive position on what factors establish the joint employer relationship.
NLRB General Counsel Richard Griffin announced on Tuesday July 29th that he has authorized issuance of Unfair Labor Practice Complaints based on 43 of 181 charges pending against McDonald’s, USA, LLC and various of its franchisees, in which the Board will allege that the company and its franchisees are joint-employers. If the General Counsel prevails on his theory that McDonalds is a joint employer with its franchisees, the result would be not only a finding of shared responsibility for unfair labor practices, but could also mean that the franchisor would share in the responsibilities of collective bargaining if unions are successful in organizing franchisors’ workers.
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