Labor and employment law attorney Paul Millus in an interview on Fox Business said that McDonald’s Corporation (NYSE:MCD) and its franchisees are jointly liable for labor and wage violations according to the National Labor Relations Board.
Millus said that there were two aspects to this law, which could potentially spell doom for the parent companies which will now be liable for franchisee infractions. “First, this is just a preliminary decision about whether the complaints go forward.” The unions wish for the parent company – McDonald’s Corporation (NYSE:MCD) – to be responsible, while McDonald’s Corporation (NYSE:MCD) does not. It comes back to the amount of control that the franchises have over themselves.
The liability being imposed on a franchise could take some time to come into effect.
“It is an administrative proceeding, so it moves faster. But what happens is if they don’t settle, and I can guarantee you there will be no settlement. The unions wants this finding in their favor and obviously McDonald’s Corporation (NYSE:MCD) does not,” Millus said.
However, given the possible Republican Congress to be elected in November 2014, there is a concern about whether there would be an impact on the politicized decision at the NLRB. Millus said that everything depends on the Board, because the Board will make the ultimate decisions.
“[…] The union is very interested because it is very important to them to get this decision as soon they possibly can. A joint employer decision would absolutely impact not only McDonald’s Corporation (NYSE:MCD), which was the biggest and baddest kid on the block, that is why they were picked, but also potentially a lot of other franchises,” Millus added.
It was argued that irrespective of whether the decision is imposed in the future, employers will change their behavior today, leading to an upending of 30 years of legal precedence. It was contested that this was an absolutely unconscionable decision, which goes after a certain kind of business model.