Chalk up what will probably be
a Pyrrhic victory for service employee unions, should the decision
stand. Counsel for the National Labor Relations Board (NLRB) has
determined that McDonald’s, the corporation, can be can be
classified as a joint employer connected to complaints by employees
who work for McDonald’s franchises. The coverage of the decision
has quickly produced more verbiage than the
declaration itself, which is pretty short and actually isn’t
much about the “joint employer” declaration:
The National Labor Relations Board Office of the General Counsel
has investigated charges alleging McDonald’s franchisees and their
franchisor, McDonald’s, USA, LLC, violated the rights of employees
as a result of activities surrounding employee protests. The
Office of the General Counsel found merit in some of the charges
and no merit in others. The Office of the General Counsel has
authorized complaints on alleged violations of the National Labor
Relations Act. If the parties cannot reach settlement in
these cases, complaints will issue and McDonald’s, USA, LLC will be
named as a joint employer respondent.The National Labor Relations Board Office of the General Counsel
has had 181 cases involving McDonald’s filed since November
2012. Of those cases, 68 were found to have no merit.
64 cases are currently pending investigation and 43 cases have been
found to have merit. In the 43 cases where complaint has been
authorized, McDonald’s franchisees and/or McDonald’s, USA, LLC will
be named as a respondent if parties are unable to reach
settlement.
The claims brought against McDonald’s accuse the company of
firing or retaliating against employees for engaging in activism
trying to pressure the fast food chain to raise their wages up to
$15 an hour. McDonald’s, the corporation, insists in
The New York Times the “the company does not determine
or help determine decisions on hiring, wages or other employment
matters.”
Given that the NLRB statement is so small, there is a lot of
“What does it mean?” speculation about how broad a precedent this
could present. Union leaders seem to think this is ultimately going
to result in them winning the fight to unionize, while business
leaders think this decision threatens decades of precedents related
to franchise law. In the
Wall Street Journal, a labor lawyer speculates that
this decision could potentially make it easier for union organizers
and for collective bargaining, because they wouldn’t have to target
individual stores.
Endemic in some of the responses to the ruling is this
inexplicable idea that businesses are also supposed to be centrally
planned. From the Times again:
And in an era when companies increasingly use subcontractors and
temp agencies to free themselves of employment decisions and
headaches, experts said the ruling could force the companies to be
more accountable.“Employers like McDonald’s seek to avoid recognizing the rights
of their employees by claiming that they are not really their
employer, despite exercising control over crucial aspects of the
employment relationship,” said Julius Getman, a labor law professor
at the University of Texas. “McDonald’s should no longer be able to
hide behind its franchisees.”
But the franchisees can be held accountable for violating the
rights of their employees, right? It’s not like there’s nothing to
be done if a McDonald’s restaurant breaks employment law. But their
pockets are probably pretty small compared McDonald’s, the
corporation, right? The “Let’s stick it to the man!” attitude is
strong in response to this ruling.
If the ruling holds, though, it is very easy to see who is going
to get screwed over as a consequence. It won’t be McDonald’s. It
will be another factor encouraging the fast food chain (and every
other fast food chain) to introduce as much automation as possible
to be reduce the potential liability of additional future
complaints like these. It has the potential to push out small
business owners (90 percent of McDonald’s restaurants are
franchises). It could encourage McDonald’s to shut down problematic
restaurants that might not be performing as well as others. Why
should some big corporation deal with those big headaches at all if
they’re not getting a decent profit?
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