McDonald's dodges joint-employer claim yet again

Dive Brief:

  • McDonald’s dodged a wage-theft charge when a federal court judge ruled in its favor, reports the Courthouse News Service. But eight McDonald’s franchise workers will argue their case against the fast-food giant before the Ninth Circuit Court of Appeals on Friday.
  • Judge Richard Seeborg granted McDonald’s summary judgment for the second time because, he said, the company didn’t fit the definition of “employer” under California labor law. The judge concluded that McDonald’s wasn’t a joint employer.  
  • Judith Zarate, Genoveva Lopez and Guadalupe Salazar, all cashiers, sued franchise owner Bobby Haynes for denying them rest and meal breaks and miscalculating their wages through a faulty payroll system. After Seeborg granted the first summary judgment, the plaintiffs tried to move forward with the case by arguing that the franchise was acting on behalf of the franchisor.

Dive Insight:

The federal district judge rejected the joint-employer charge against McDonald’s. But developments continue in the landmark Browning-Ferris joint-employer case. The D.C. Circuit Court of Appeals called the National Labor Relations Board’s definition of joint-employer as defined in Browning-Ferris as vague and conflicting. At issue are the NLRB’s rule that a joint employer has either direct control or indirect control over the wages, hiring and supervision of a contracting entity’s employees.

Fast-food chain Jack in the Box won its joint-employer lawsuit by passing what’s called an “economic reality” test. Companies are joint employers if they: 1) have hire and fire power over workers; 2) supervise and control workers’ schedules; 3) determine pay rates and methods; and 4) keep employment records.

The economic reality test could clarify the vague, confusing NLRB definition of joint employer. In the meantime, employers need to watch for the courts' decisions.

Filed Under: Legal Corporate News