A major business group is demanding that the National Labor Relations Board turn over all internal documents about its controversial decision to treat McDonald’s as an employer in unfair labor cases.
The International Franchise Association said Thursday that it would file a Freedom of Information Act request with the NLRB for the documents. The board’s decision in July to treat the world’s largest fast-food chain as a joint employer with all of its individual franchises sent shockwaves through the business community, who warned it could legally undermine the entire franchising business model.
“We fear that the floodgates have opened because of the general counsel’s opinion. And given the lack of transparency on the rationale behind the decision, it is creating a huge amount of uncertainty in the franchising community,” said IFA President and CEO Steve Caldeira. “This needs to stop.”
In a July 29 announcement, the NLRB’s general counsel, Richard Griffin, said he would instruct his attorneys bringing unfair labor practices complaints against McDonald’s restaurants to include the national corporation as a defendant. That effectively made the corporation legally responsible for any labor violations by people using its name. The NLRB is pursing complaints against as many as 43 McDonald’s restaurants, after initially investigating 181.
McDonald’s protested, saying that 80 percent of its 3,000 locations are privately owned by franchisees and therefore it cannot be held responsible for those owners’ workplace decisions.
Business groups warn that if the decision becomes an industry-wide precedent, it could force many companies to abandon the franchise model altogether because the legal liability would be too high. That would take away one of the main ways many people become entrepreneurs.
Griffin’s reasoning has never been made public. Aside from a press release, the NLRB has not made available any documentation relating to it.
After the July announcement, spokesmen for both McDonald’s and Berlin Rosen, a public relations firm representing the plaintiffs, told the Washington Examiner they had never received any letters or other documents relating to the decision. Instead, NLRB officials told them about it over the phone.
“My understanding is that there is not something [official] in writing,” Berlin Rosen senior associate Laura Brandon said at the time.
Labor law experts say that makes it extremely difficult for McDonald’s or anyone else to fight the NLRB’s action because there is nothing official for them to challenge in court. The NLRB announcement merely states that Griffin has allowed the corporation to named as a co-plaintiff, not that any legal ruling was issued.
A spokesman for the NLRB could not be reached for comment.
