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McDonald's Goes Head to Head With Labor Regulators The burger giant is accused of violating employee rights as a joint employer.

By Lindsay Friedman

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

McDonald's and the National Labor Relations Board will finally go head-to-head in court on Monday as the fast-food company faces long-standing allegations that it violated employee rights under the National Labor Relations Act.

The NLRB began filing charges against McDonald's in Nov. 2012, accusing McDonald's and a number of its local franchises of violating workers' rights in its response to protests for a union, better wages, treatment and conditions.

In Dec. 2014, the board determined 86 cases were worthy of investigation. Eventually, the board found 43 cases had merit.

Related: Regulator Names McDonald's a 'Joint Employer'

In July 2014, the NLRB stated that McDonald's could be considered a joint employer, meaning it could be directly involved -- and therefore liable for -- the control and supervision of employee activity at any of its franchised locations.

Historically, McDonald's would not be held liable for employee-related decisions made by its franchisees. Right now, franchised locations make up about 80 percent of its global presence.

McDonald's has continued to contest its status as a joint employer, arguing that it can't be held accountable for the actions of independent franchisees. The company did not respond to requests for comment.

While the NLRB's directive applied only to a handful of cases related to McDonald's, it sent a message to franchises everywhere that a similar dynamic could become the norm. The move came on the heels of the NLRB's case against Browning-Ferris Industries, which resulted in loosened requirements for who can be considered a boss under labor law. The implication is that franchisees and their employees could also have more bargaining power.

While the franchising world fears that a joint employer precedent will destroy the franchise model as we know it, others are optimistic. "It doesn't spell doom," Catherine Ruckelshaus, general counsel for the National Employment Law Project, said in a press call Thursday. "Strong joint employment will help not only workers and small businesses to make ends meet, it would even the playing field for true mom-and-pop businesses."

The possibility of a joint employer standard sparked debate in Congress, with Republican lawmakers attempting to block it from happening.

Court proceedings will begin on Monday in New York, then Chicago and Los Angeles to determine if McDonald's can actually be considered a joint employer and if violations did occur at varying franchises.

It's expected on the first day of trial the NLRB's general counsel will make an opening statement that addresses the technical issues of the case and any possible motions. It's also possible that executives from McDonald's will be introduced to testify.

It's likely McDonald's will seek to keep some of the events of the trial private since some of the documents involved are confidential, says David Dean of law firm James & Hoffman, counsel to fast-food workers.

Related: Regulator Names McDonald's a 'Joint Emoployer'

Lindsay Friedman

Staff writer. Frequently covers franchise news and food trends.

Lindsay Friedman is a staff writer at Entrepreneur.com.

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