A National Labor Relations Board (NLRB) ruling released Tuesday could ease unionization at fast food restaurants and imperil the franchising business model.
NLRB General Counsel Richard Griffin, an Obama appointee and longtime union lawyer, ruled that McDonald’s could be held liable for wage and employment violations committed by franchisees.
His findings departed from the longstanding precedent that corporations are not responsible for the actions of franchise owners, who pay for the right to use the company brand, but control day-to-day operations, such as pay and scheduling.
Griffin’s office evaluated more than 150 complaints from fast food workers who said they were unfairly punished for participating in union-backed strikes and protests. Griffin, who previously served on the national NLRB board before his appointment was declared unconstitutional, ruled that McDonald’s should be considered a joint employer in more than 40 of the cases.
Business groups said the ruling would have dire consequences.
The ruling could damage hiring and demonstrates President Obama’s labor appointees’ “contempt” for longstanding precedent and the board’s duty to serve as a labor arbiter instead of a union advocate, said David French, the National Retail Federation’s senior vice president for government relations.