Joel Libava
I’m talking big.
Especially if you’ve been keeping up on what the NLRB is attempting to do to the franchise business.
Keep reading.
The Latest McDonald’s News
From Buzzfeed.com:
“McDonald’s Corp. agreed on Friday to pay $3.75 million to settle a lawsuit with about 800 Bay Area-based franchise workers, who claimed they were owed overtime pay due to flaws in payroll systems and denied state mandated breaks, among other complaints. The settlement is the first time that McDonald’s corporate is paying franchise workers to settle a suit, lawyers said. It must now be approved by a district judge.”
That’s a lot of money-even for a huge franchisor like McDonald’s.
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Why This Is A Big Deal
The National Labor Relations Board (NLRB) announced (a while ago) that its Office of the General Counsel is going to name McDonald’s as a “joint employer” in upcoming court cases. Do you know what a joint employer is?
A joint employer means that the McDonald’s corporation and the McDonald’s franchisees are both considered employers. So, if you’re cooking burgers at a franchise-owned McDonald’s, you have two employers: Your boss and the big boss at McDonald’s corporation in Illinois. That’s a problem.
If you’re fired, who approves your unemployment claim?
If you get hurt, your workman’s comp lawyer can go after…who?
Those two examples are the tip of the iceberg in what’s shaping up to be a very confusing potential ruling by the NLRB. There’s more on joint employment from the U.S. Department of Labor. It’s worth a read.
The part that’s the big deal here: McDonald’s just wrote a large check to 800 workers. They’ve never done anything like it before. Their decision to do this is a big deal.
From Buzzfeed:
“The fact that McDonald’s settled the case for a substantial amount of money ‘does suggest that its lawyers have concluded that there is some risk’ that it could have been found to be a joint employer had the case moved forward.”
The Latest News From McDonald’s Is A Big Deal
There’s one more reason why the news of McDonald’s writing the $3.75 million check to these employees is big. The reason…
Unions are going to want in even more. They’re going to push even harder to represent hourly fast-food workers. I don’t see that as a good thing for fast food franchise owners.
This news does not mean the end of franchising as we know it. It does mean there will be a few more headaches for franchisees and franchisors in the future.
That’s why there are lawyers.
About the Author
Joel Libava is The Franchise King® — an independent franchise advisor with 25+ years in the industry, two published books on franchising, and his writing has been featured in The New York Times, Forbes, CNBC, Entrepreneur® Magazine and others. In addition, he wrote exclusively for the U.S. Small Business Administration blog for eight years. He doesn't sell franchises. Instead, Joel helps you figure out if franchise ownership is actually right for you — and if it is, teaches you his powerful, proven-to-work franchise research techniques, so you can make a smart, informed decision on a franchise to own and be your own boss.
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