The franchise industry and the National Labor Relations Board (NLRB) are gearing up for another battle regarding fast-food employees and the definition of franchising.
On Friday, the NLRB issued complaints against McDonald's franchisees and McDonald's corporate as joint employers in 86 alleged labor violations. The biggest complaint: McDonald's took unlawful action against employees involved in fast-food strikes and other protests attempting to improve wages and working conditions.
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McDonald's and various industry groups immediately decried the decision as a violation of the franchise system.
"This is the nightmare before Christmas for local franchise businesses," IFA executive Robert Cresanti said in a statement. "The Board has effectively legislated a change to the definition of who an employer is, which will impact hundreds of thousands of businesses."
Others who spoke out against the decision include representatives from the Workforce Freedom Initiative of the U.S. Chamber of Commerce, the National Restaurant Association and the National Retail Federation. McDonald's says it will contest the joint employer allegation as well as the unfair labor practices charges.
This is just the latest clash between the franchise industry – as represented by McDonald's – and the NLRB. The joint employer conflict began in July, when the NLRB decided that McDonald's can be considered a joint employer for workers at franchise-owned restaurants. Since that time, franchisees have argued for a reversal of the joint employment decision and tried to convince the NLRB to provide reasoning for the decision.
The IFA and its allies argue that the NLRB is overstepping boundaries to support labor unions, specifically the Service Employees International Union (SEIU) which has helped fund and plan the fast-food strikes. According to opponents of the idea of joint employment, the franchising industry will suffer as fear of lawsuits and uncertainty make opening new franchises more risky for both franchisors and franchisees.
Meanwhile, while the NLRB has not revealed its thought process behind the decision, those who support joint employment see the stance as a necessary responsibility for McDonald's -- especially when employees from a wide variety of locations have blamed employers not only for poor pay, but also wage theft and discriminatory discipline.Related: International Franchise Board Tries to Dig Up Details on Labor Board's 'Joint Employer' Decision