In the quest to expand liability for real and imagined violations of employment laws, and to find more and deeper pockets, the latest target for plaintiffs’ lawyers and unions is the “joint employer.” The joint employment concept is a decades-old doctrine that applies where two companies are so intertwined and jointly involved with the employment policies and the supervision of employees that both companies can be liable violating employment laws such as wage and hour, wrongful discharge, or discrimination. The application of “joint employment” can also vastly increase the pool of employees in class actions and for union organizing.
The newly constituted and highly politicized NLRB is currently reviewing its standards for finding “joint employers” in a case involving Browing Ferris Industries of California and a staffing agency. Employers fear that the Board will take a radical turn toward making joint employment much easier to establish.
On July 29, 2014, the NLRB’s general counsel ominously ruled that unfair labor practice charges can proceed against McDonald’s franchisees and the franchisor, McDonald’s Corp. as a joint employer. The Board is thus backing the SEIU, and the employee advocacy group Fast Food Forward, in an attempt to organize and raise wages for fast food restaurants around the country. The union hopes to get neutrality agreements from parent companies that will make it easier to organize one franchise store after another.
A spokesman for the International Franchise Association said, “Ruling that franchises are joint employers will be a devastating blow to…the franchise model.” This development could affect fast food restaurants, hotels, and convenience stores and other retailers in California. The NLRB’s aggressive stance is sure to be litigated in the courts, but look for other agencies and plaintiffs’ lawyers to be pressing the issue of “joint employment.”