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McDonalds and U.S. Labor Board Square Off in Trial

Lawsuit will have ramifications across entire franchising industry

By Nick Powills1851 Franchise Publisher
SPONSORED 3:15PM • 03/11/16
The highly anticipated trial between McDonald’s and the National Labor Relations Board (NLRB) began on Thursday. The issue at hand is whether the Illinois-based McDonald’s Corp is a “joint employer” of employees at its independently owned franchised units.

The trial before an administrative NLRB in New York is attracting national attention because the ruling, no matter the decision, will have a ripple effect across the entire franchise industry. To many, this trial represents single greatest threat to the entire franchise business model.

According to a recent story by Reuters, NLRB’s general counsel issued complaints in 2014, eventually consolidating a case for trial against the company and franchisees in six cities.

Attorney Robert Brody, who represents New York City franchisees in the case, backed McDonald’s claiming “McDonald’s may provide the ‘cookbook,’ but franchisees make their own decisions on employment issues.

A lot remains to be seen how the trial will play out, but all of franchising is keeping a close eye on how it develops.

To read the original Reuters story, click here.

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