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Old 08-07-2014, 11:41 AM   #1
XDCX
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Default NLRB rules that McDonald's is liable for Franchisee's employees

Last week the National Labor Relations Board ruled that the corporate parent of McDonald's is liable for employment decisions/actions made by their franchisees.

Here's an excerpt from a news report from the Chicago Tribune:
The ruling by the NLRB's general counsel says that McDonald's can be held liable for the employment decisions made in its franchised outlets, which number some 13,000 in this country. So if a rogue franchisee in Sasquatch Hollow violates the law on overtime or wages, the Oak Brook-based corporation can face sanctions.
I've always believed that the NLRB has a pro-union agenda and I question why the agency is even relevant any longer. That said, the ruling is important and now McDonald's will have to fight the ruling using an appeals process.

As we've discussed in many other threads, I believe the McDonald's franchise system is what many (perhaps most) OEMs dream of. Essentially the franchisor has complete control of the franchisee but doesn't have to deal with the day to day operations.

I feel confident that McDonald's will get the NLRB's decision overturned but I doubt it will the last time the Federal Government tries to interject itself into matters that should be left to the market.
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Old 08-07-2014, 11:52 AM   #2
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Default Interesting article from a McDonalds employee

Here's a link to an interesting article from an employee who has worked at a McDonald's franchise for 25 years - click here

While the article has a huge bias I thought some of the examples of how much control McDonald's has were interesting. As I've stated in other threads, McDonald's seems to have found the magical ROI that's required for franchisees to give up control of their business.

On a final note, if you've read the article in the link above I'd be curious to hear if your impression of the author changed as you read the second to last paragraph?
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Old 08-08-2014, 07:47 AM   #3
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Just think of this, if OBAMA can make this decision stick...YOUR franchise can make labor decisions for your manufacturer that causes them to be LIABLE! What a huge event this could be.
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Old 08-08-2014, 11:38 AM   #4
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Quote:
Originally Posted by 57years View Post
Just think of this, if OBAMA can make this decision stick...YOUR franchise can make labor decisions for your manufacturer that causes them to be LIABLE! What a huge event this could be.
I totally agree. That's why I'm confident the ruling will be overturned - there's simply too much at stake and the franchisors will keep pressing until this ruling goes away.

I also think the NLRB's ruling was a tip of the hat to their union friends - it would be a lot easier for the unions to organize McDonald's employees if they could be seen as one large labor force as opposed to a labor force with 13,000 different employers.

On the upside, this ruling might limit the extent the franchisors try to control their franchisees if they fear more of this type of ruling in the future.
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