Employment Law Blog

Employers – Are You Prepared for New NLRB Election Rules?

On April 14^th, the new National Labor Relations Board (“NLRB”) election rules came into effect, creating a potential headache for employers. Perhaps most critically, the timeline between the initial petition for union election and the election itself may be as short as 13 days, giving employers limited notice of potential union organization and activity. These accelerated elections are derisively (but maybe not unjustly) referred to as “ambush” or “quickie” elections. More >

Is it Time to Review Your Employee Handbooks?

On March 18^th, National Labor Relations Board (“NLRB”) General Counsel Richard F. Griffin, Jr., issued a report[1] (“the Report”) concerning employer rules and employee handbooks in light of recent employer rule cases. Most of the violations found in these cases occurred under the first prong of the two-prong the test in Lutheran Heritage Village-Livonia,[2] which looks to whether an employer rule explicitly restricts protected activity under Section 7 of the National Labor Relations Act (“NLRA”). The Report used these cases as a guide to provide clear examples of both illegal rules and their legal counterparts, giving employers a valuable tool in evaluating employee handbooks and workplace rules. More >

Part II: What Is A “Micro-Unit” – and Why Does It Matter?

Earlier this week, the standard established by the NLRB in Specialty Healthcare was discussed. As a quick review, the Specialty Healthcare decision made it easier for small collective bargaining groups known as “micro-units” to form in the workplace. These micro-units are easier to unionize, and the employer is left with the burden of showing why excluded employees of the proposed unit should be included. Specialty Healthcare was decided by the NLRB in 2011 and affirmed by the Sixth Circuit in 2013, but it was not until this summer that employers learned how the NLRB would apply this decision to other industries. More >

“Do You Want Liability With That?” The NLRB McDonald’s Decision that could undermine the Franchise Business Model (Part II)

Monday’s post discussed the decision of NLRB’s General Counsel to hold McDonald’s Corp. jointly responsible with its franchise owners for workers’ labor complaints. The decision, if allowed to stand, could shake up the decades-old fast-food franchise system, but it does not stop there. The joint employer doctrine can be applied not only to fast food franchises and franchise arrangements in other industries, but also to other employment arrangements, such as subcontracting or outsourcing.

This decision could also impact the pricing of goods and services, as franchisors would likely need to up costs to offset the new potential liability. Everything from taxes to Affordable Care Act requirements could be affected if the decision stands.

If you are a franchisor and are currently in what could be determined to be a joint employer relationship, consider taking steps to further separate and distinguish your role from that of your franchisee. While franchisors should always take reasonable measures to ensure that franchisees are in compliance with applicable federal and state employment laws, they should take care to not wield such force over them to give the appearance of a joint-employer relationship.

We will be following the NLRB decision and keep you updated as the issue progresses.

Luke A. Wingfield is an associate with McBrayer law. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mcbrayerfirm.com or at (859) 231-8780, ext. 1265. 

Services may be performed by others.

This article does not constitute legal advice.

“Do You Want Liability With That?” The NLRB McDonald’s Decision that could undermine the Franchise Business Model

On July 29, the National Labor Relations Board (“NLRB”) General Counsel authorized NLRB Regional Directors to name McDonald’s Corp. as a joint employer in several complaints regarding worker rights at franchise-owned restaurants. Joint employer liability means that the non-employer (McDonald’s Corp.) can be held responsible for labor violations to the same extent as the worker’s “W-2” employer.

In the U.S., the overwhelming majority of the 14,000 McDonald's restaurants are owned and operated by franchisees (as is the case with most other fast-food chains). The franchise model is predicated on the assumption that the franchisee is an independent contractor – not an employee of the franchisor. Generally, the franchisor owns a system for operating a business and agrees to license a bundle of intellectual property to the franchisee so long as on the franchisee adheres to prescribed operating standards and pays franchise fees. Franchisees have the freedom to make personnel decisions and control their operating costs.

Many third parties and pro-union advocates have long sought to hold franchisors responsible for the acts or omissions of franchisees – arguing that franchisors maintain strict control on day-to-day operations and regulate almost all aspects of a franchisee's operations, from employee training to store design. Their argument is that the franchise model allows the corporations to control the parts of the business it cares about at its franchises, while escaping liability for labor and wage violations.

The NLRB has investigated 181 cases of unlawful labor practices at McDonald’s franchise restaurants since 2012. The NLRB has found sufficient merit in at least 43 cases. Heather Smedstad, senior vice president of human resources for McDonald’s USA, called the NLRB’s decision a “radical departure” and something that “should be a concern to businessmen and women across the country.” Indeed it is, but it is important to note that General Counsel's decision is not the same as a binding NLRB ruling and that it will be a long time before this issue is resolved, as McDonald’s Corp. will no doubt appeal any rulings.

For more about the potential effects of this decision, check back on Wednesday.

Luke A. Wingfield is an associate with McBrayer law. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mcbrayerfirm.com or at (859) 231-8780, ext. 1265. 

Services may be performed by others.

This article does not constitute legal advice.

Are Your Workplace Policies Too Upbeat for the NLRB?

Many employers know that keeping an upbeat and positive workforce is crucial to any successful business; however, recent NLRB rulings penalize certain policies that encourage such an environment, including policies that encourage or promote workplace civility. More >

NLRB Decision Limits Employer’s Off-Duty Policy, Part II

Earlier this week, we provided information relative to the NLRB’s decision in Piedmont Gardens, 360 NLRB No. 100 (2014).The issue in the case was the employer’s ability to regulate off-duty employee access to the property, a nursing home. The company handbook contained a provision that generally prohibited off-duty access, unless such access was previously authorized by a supervisor. The NLRB found the “unless previously authorized” caveat to be unlawful because it gave supervisors an unlimited scope in determining when and why employees could access the building. More >

NLRB Decision Limits Employer’s Off-Duty Policy

The National Labor Relations Board (NLRB) recently issued a decision in Piedmont Gardens, 260 NLRB NO. 100 (2014) regarding the legality of an employer’s off-duty access policy. Piedmont Gardens is a nursing home. Many employers, especially those in health care or other highly-regulated industries, have policies that prohibit against employees lingering around the job site when not working. Off-duty employees can not only be a disruption to the business and create security risks, but can also increase an employer’s liability. After the newest NLRB decision on the issue, however, employers should review their policies to ensure that they do not run afoul of federal law. More >

What Does the Northwestern Decision Mean for Unions?

It is not often that a decision from the National Labor Relations Board (“NLRB”) makes headlines, but the recent decision declaring Northwestern scholarship football players as “employees” of the university has done just that. While those in the sports world are theorizing about the ruling’s impact on college athletics, the decision does offer another takeaway. More >

Does the Northwestern Decision Change the Direction of College Athletics?

On March 26, 2014, Peter Ohr, Regional Director for the National Labor Relations Board (“NLRB”), issued a landmark decision: a group of Northwestern football players receiving scholarships qualify as employees of their university, and have the right to form a union and bargain collectively. The decision followed after a petition was filed by the College Athletes Players Association (“CAPA”), led by former Northwestern quarterback Kain Colter. The university opposed the petition, arguing that scholarship football players are akin to stipend-receiving graduate student assistants, who have historically been categorized as non-employees by the NLRB. More >