A ruling has stated that McDonald’s could be considered a “joint employer” along with its more than 2,000 US franchisees, a decision that could set a precedent for many franchise brands in restaurants and other service industries.
The recommendation published by the National Labor Relations Board’s Division (NLRB) of Advice means that the franchisor could be held liable for any wrongdoing or laws broken by an owner-operator.
Franchisees own and operate over 90% of the brand’s c14,000 US locations. It has more than 35,000 restaurants in more than 100 countries, and more than 80% of those sites are franchised.
According to reports in the US, McDonald’s plans to contest the decision.
The company had already been the focus of a debate over such “vicarious liability” when employees sued several franchisees as well as the fast food operator earlier this year, alleging that officials “systematically stole wages” by not paying overtime or having crew members work off the clock.
The National Restaurant Association’s (NRA) vice president of labour and workforce policy, Angelo Amador said: “The NLRB’s attempts to overhaul the law will have dire consequences to franchisees, franchise employees and the economy as a whole.
“By making franchisors liable for their franchisees’ employment practices and redefining individually owned franchises as ‘big business,’ the NLRB would disrupt the franchisor-franchisee relationship and impede entrepreneurship and restaurants’ ability to continue to create jobs, particularly in an increasingly challenging economic environment.”
