WHILE MCDONALD FRANCHISES are the subject of the Vox.com article at http://www.vox.com/2015/1/22/7873661/mcdonalds-lawsuit-harassment-discrimination , the REAL issue is
BY WHOM IS AN EMPLOYEE EMPLOYED?
Does the franchise holder who hired the person employ the person (fairly obviously, "yes") or does the franchise holder who hired the person AND the corporation that franchised its name ALSO employ the person.
In other words, was my son who once worked at a chain hamburger joint employed ONLY by the owner of the particular store OR was my son employed by the owner of the particular store AND the corporation that sold its name to the owner of the particular store.
How much responsibility does a trucking company have if a contract driver, using his own tractor to pull a trailer owned by still another company have if the driver falls asleep at the wheel and crashes into someone? In this case, is the trucking company no more than a broker, and even if it is, what is its liability?
If the Orkin man fails to debug the property or the Culligan man's water is less than crystal clear, who's to blame? Orkin or the franchisee; Culligan or the franchisee?
That's a question, in various forms, being asked across the 50 states.
IN CALIFORNIA, for example, the the state's supreme court last year ultimately ruled in favor of Domino's Pizza, saying it was not a joint employer along with its franchise operators.
On the other hand, the National Labor Relations Board (NLRB)
- In a yet-to-be-decided case, the NLRB questions whether a waste management company is an employer along with its subcontractors
- In December, the NLRB decided to authorize complaints against both franchise operators and the McDonald's parent company, alleging retaliation against employees who participated in protests demanding $15-per-hour wages.
According to the article, Even though the McDonald's case was a preliminary decision, it was considered a big win for labor-rights advocates.
Bottom line: Right now it seems to depend upon jurisdiction.
But whose jurisdiction?
The California case was intrastate; the NLRB tries to set rules for interstate activities.
Which raises another question: If an action is against an inTERstate organization, e.g., McDonalds, can an action ALSO be brought in the state where the condition occurred? Double jeopardy?
The article ends by noting The broader question of what, exactly, is an "employer" could even affect the relationships between, for example, retailers and suppliers, as well as employers and staffing agencies. Settling this question could be a years-long process, and decisions could differ from jurisdiction to jurisdiction.
To the non-legal mind, this seems destined for the Supremes.
In the meantime, it behooves risk management practitioners to raise the issue with corporate legal counsel or, in the absence of such counsel, with management responsible for franchise and vendor relations.
I once took a couple of Business Law courses and one thing I vividly recall is the instructor, a lawyer, impressing us with the idea that "courts don't like unwritten agreements" or, by extension, arguments over things not included in a contract.
But your employer's legal counsel knows that. Doesn't it?