This post is part of the On the Margin blog.
McDonald’s executives, according to the Washington Post, are appearing at a big hearing in New York about the National Labor Relations Board’s joint employer ruling.
But executives are confident about their chances, at least eventually, in avoiding being declared a joint employer of its franchisees’ employees.
At an investor conference on Wednesday, both Mike Andres, president of McDonald’s USA, and Kevin Ozan, the company's CFO, expressed confidence that McDonald’s is not a joint employer of its franchisees’ workers.
“We strongly believe we’re not a joint employer,” Ozan said at the UBS Global Consumer Conference Wednesday. “It may drag on a little while, but we’re prepared to defend ourselves vigorously.”
There are few roadblocks between McDonald’s and its ultimate success that are bigger than the NLRB’s ruling. And, indeed, few items frighten franchisors of any type nearly as much.
In 2014, the NLRB said that McDonald’s exerts enough control over its franchisees to be considered a “joint employer” of those franchisees’ workers, as part of an overall effort to redefine the nature of employment.
The ruling sent shudders throughout the franchise business model, because if McDonald’s is ultimately called a joint employer, it would be liable for its employees’ human resources actions. It could also fuel union activity in the business. Critics believe it would destroy franchising, or at least change franchising permanently.
Executives at the UBS conference, however, said that they don’t get involved in their franchises’ employment actions, and that will ultimately win out as the case is fought in court.
“We have no involvement in our franchisees’ hiring or firing,” Andres said. “This is settled law as far as we’re concerned.
“It’s just a distraction now, but we’re going to have to deal with it.”
According to the Washington Post, the case was scheduled to begin today before an administrative law judge. Arguments could go on for weeks before the judge decides. Then either side could appeal to the full NLRB board. And ultimately the matter could be decided in court.