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Paul Zimmerman
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NLRB Says Franchisors are Jointly Liable for the Acts of Franchisees

Contrary to decades of established law and National Labor Relations Board (NLRB) precedent, the NLRB recently held that franchisors can be held liable for the unfair labor practices of their franchisees. The NLRB’s General Counsel’s office authorized a litany of unfair labor practices complaints from McDonald’s workers to proceed, with McDonald’s USA LLC named as a joint employer defendant in numerous unfair labor practice cases filed by employees of McDonald’s franchisees.

This is a distressing ruling for employers, as it will create substantial risk in the franchise arena. Franchisors with many locations will now be forced to scrutinize the operations of their franchisees in order to ensure they are complying with labor laws. McDonalds stated that it has no control over how its 3,000 independent franchisees determine their various hiring practices.  Further, this decision could extend beyond unfair labor practices, potentially including disputes involving benefits, and various other kinds of employment claims.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.