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The Practical Employer

McDonald’s Settles Joint Employer Case With NLRB

Let's hope these recent developments signal a return to a more common sense, business-friendly joint employment standard.

It has been nearly four years since the NLRB filed complaints against McDonald’s, seeking to hold it liable as a joint employer for the unfair labor practices of its franchisees.

I have suggested that “if franchisors are equal under the National Labor Relations Act with their franchisees, then we will see the end of staffing agencies and franchises as a viable business model.”

In the interim, the NLRB has flip-flopped on its joint employment standard several times, and this very important area of the law has been in flux.

Now comes word that the NLRB and McDonald’s have reached an 11th hour settlement.

According to Law 360, McDonald’s will neither admit any wrongdoing, nor that it is a joint employer with its franchisees. Yet, its franchisees will receive “satisfaction of their claims.”

For its part, McDonald’s called the multiyear litigation “wasteful,” as “McDonald’s USA is not and never has been a joint employer with its franchisees.”

While the terms of the settlement are not available, the employees’ attorney is not pleased: “In a real settlement, McDonald’s would take responsibility for illegally firing and harassing workers fighting to get off food stamps and out of poverty. We look forward to presenting our objections to the judge.”

Joint employment has been one of the most significant issues facing employers over the past few years. This settlement underscores the current NLRB’s hostility toward Browning-Ferris and the board’s prior expansion of its historic joint employment standard. Let’s hope these recent developments signal the beginning of the end of the expansion, and a return to a more common sense, business friendly joint employment standard.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.