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Joint Employers

This past August, the National Labor Relations Board’s (NLRB) Office of General Counsel issued an administrative decision that could have a significant effect on joint employer status.  Following several complaints submitted by McDonald’s employees, the NLRB named corporate McDonald’s USA, LLC—in addition to the McDonald’s store owners—as a joint employer.  This means that as a joint employer, McDonald’s would be liable for each of its franchisees’ unlawful acts.  Clearly, if this decision stands, the number of cases alleging joint employer liability against franchisors will escalate.

Some employers even fear that the decision could lead to changes in the area of wage and hour law, where workers have sought to expand the definition of joint employer status under the Fair Labor Standards Act (FLSA).  The current regulations interpreting the FLSA provide that an individual may be an employee of more than one employer at the same time.  Courts apply various “joint employer” tests, considering the totality of the circumstances surrounding the employment relationship.  If a joint employment relationship exists, both employers are responsible, individually and jointly, for FLSA compliance.

Source:  Bloomberg BNA, Franchisors and the Specter of Joint Employer Liability for Franchisee Misconduct (September 19, 2014),
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