- Written by Carl Larson
The NLRB’s General Counsel is attempting to bring back the dead by advancing a joint employer standard that hasn’t been used in 30 years. This threatens not only big franchisors like McDonald’s, but also companies that use temp agencies, farm labor contractors, or other labor suppliers. Even if a company exercises little to no control over the employees provided to it, it may still wind up being forced to collectively bargain with a union or answer to unfair labor practice charges alleged against their labor supplier. This obviously creates much greater exposure for an employer than under previous interpretations of the National Labor Relations Act (NLRA).
If this new standard advanced by the General Counsel takes hold, it could be an end to the franchise system as we currently understand it. Under our current system, an employer can generally count on avoiding liability for franchisee or labor contractor conduct by making sure to avoid involving themselves in the human resources function. Employers are free to exercise control over marketing, signage, pricing, training of managers, hours of operation, and methods of preparing their products. Problems generally arise where the employer gets involved in issues of employee discipline, hiring, firing, compensation rates, and work schedules.
In the General Counsel’s view, a client employer is a joint employer anytime they wield sufficient influence over the working conditions of another entity’s employees such that meaningful bargaining could not happen without them. The two cases to watch are McDonald’s USA, and Browning-Ferris, both currently pending before the NLRB. Following a wave of organizing in the fast food industry in late 2012, the General Counsel’s office has pursued upwards of 90 cases of unfair labor practices against McDonald’s Franchises alleging McDonald’s USA as a joint employer.
- Written by Glen Williams
Since 1959, the Labor Management Reporting and Disclosure Act (“LMRDA”) has compelled businesses to inform to the government when they hire attorneys or consultants to discourage employees from unionizing. The LMRDA currently requires employers and their labor relations consultants to report any arrangement where a consultant will undertake activities to “persuade” employees regarding their right to organize and bargain collectively. There is a stiff financial and/or criminal penalty if employers and consultants fail to report these “persuader activities.”
Traditionally, this mandatory reporting rule has included an exemption for consultants or attorneys who merely “advise” employers but do not have direct contact with employees. The “advice exemption” applies even to agreements where a consultant’s activity includes providing the employer and its management team with advice or materials for the employer’s use in persuading employees regarding union-related activities.
Since 2011, however, the Department of Labor and its Office of Labor-Management Standards have been trying to enact a proposed rule that would close the proverbial loophole of the “advice exemption.” The DOL’s proposed rule would require reporting any agreement if an attorney or consultant would be engaging in conduct that goes beyond the “plain meaning” of “advice.”