McDonald’s Is a “Joint Employer,” Says National Labor Relations Board

It may sound wonky, but this is potentially big, big news:

McDonald’s Corp. says it has been notified by a labor regulator that it can be named as a “joint employer” for workers in its franchise-owned restaurants.

The decision by the National Labor Relations Board was being closely watched because it could potentially expose McDonald’s to liability for the working conditions in its franchisees’ stores.

This is, of course, the issue at the heart of the International Franchise Association’s hilarious lawsuit against Seattle’s new $15 minimum wage ordinance. The IFA alleges that Seattle’s minimum wage law (and other proposed laws like it) would illegally discriminate against franchisees. Franchisees are small businesses, the IFA argues, totally independent from the corporate brand, and thus should be treated just like any other small business.

But apparently, the NLRB disagrees.

Barring a dangerously radical Supreme Court ruling overturning a century of legal precedent, the IFA never had much chance of prevailing in court; the NLRB’s decision only makes it harder. But if it holds, the NLRB’s decision could have a much more far reaching impact. Labor organizers have long argued that franchisers like McDonald’s should be held accountable for the low wages and poor working conditions at their franchisees’ stores, because corporate HQ exerts so much operational control. An official designation of McDonald’s and other franchisers as “joint employers” could open the door to new legal and labor organizing strategies.