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Labor dispute involves issue of joint liability for franchises

For businesses, managing workforce is an important task, and one which can easily lead to legal liability if it is done dishonestly or improperly. For businesses which have full control over their workforce, managing related liabilities is a relatively clear task, at least with respect to who is responsible, but what about companies that don’t have full control of their workforce, as is the case with franchises?

This is the issue underlying an ongoing labor dispute involving McDonald’s. Earlier this month, the fast food chain was accused of making coercive statements toward employees at several franchises. Threats were apparently made to workers who participated in activities aimed at improving wages and working conditions and a complaint was filed.

The National Labor Relations Board, the agency hearing the dispute, will have to decide in the case whether McDonald’s is responsible for unfair labor practices committed by its franchisees. Ordinarily, businesses have to have control over hiring and termination in order to be held liable for mistreatment of workers. In this case, it will have to be determined whether McDonald’s had enough control over the employees in question to be considered jointly liable for the unfair labor practices of its franchisees.

For its part, McDonald’s is arguing that because franchisees are responsible for the wages and working conditions of their employees, they should be held solely responsible for unfair labor practices. It will be interesting to see what happens with the case, as any changes regarding workforce liability would almost certainly change how franchises and franchises structure their operations. We’ll keep our readers notified of any updates in the case.