ILNews

Gruber: NLRB announcement shakes up joint-employer standard

August 13, 2014
Back to TopCommentsE-mailPrintBookmark and Share

By Andrew Gruber

It is ironic that the week after Burger King’s new CEO is heralded for a profitability plan designed around the increase of franchises and the reduction of company-owned locations, the general counsel of the National Labor Relations Board directed officials to treat McDonald’s USA as a “joint employer” with its franchisees for purposes of the National Labor Relations Act. Some say that it is the juxtaposition of these two storylines that underscores the tension between the business community and the current administration. Nonetheless, this new direction by the board may impact everything from wages to potential unionization for franchises, staffing companies and subcontractors.

gruber-andy.jpg Gruber

Over the past two years, union-supported McDonald’s workers have waged the “Fight for $15” – a coordinated attempt to increase wages in the fast food industry and call attention to perceived work-related concerns. Such efforts have dovetailed with the social and political push for an increase in the minimum wage and the still-beating Occupy Wall Street movement. McDonald’s workers have engaged in a number of walkouts, protests and rallies – each designed to bring publicity to their movement.

These efforts have the “natural” effect of creating tension between management personnel at the restaurants (many of which are franchise owned and operated) and local workers. This has resulted in the filing of unfair labor practice charges with the board, alleging that management has interfered with workers’ rights protected by the Act. At last count, there were 181 charges pending before the board, at least 43 of which involved allegations that McDonald’s USA was a joint employer with its franchisees, sharing responsibility for the treatment of the workers and the resulting liability.

Richard Griffin Jr., who effectively serves as the board’s chief prosecutor, announced July 29 that the board will seek to hold McDonald’s USA liable for its franchisees’ employment practices. In so doing, he is construing the board’s “joint- employer” standard far broader than the standard the board has followed in years past. Griffin aligns closely with the board’s pro-labor majority, which means the board will likely accept his position.

Indeed, the board is currently contemplating a revision to its joint-employer standard across a broader spectrum. In Browning-Ferris Industries of California, Inc. et al. v. Sanitary Truck Drivers and Helpers Local 350, International Brotherhood of Teamsters, the board is currently accepting amicus briefs from interested parties on whether to alter the board’s position on joint-employer liability. For decades, the board has determined that legally separate entities qualify as a joint employer only when they share basic employment functions (hiring, firing, supervision). See TLI Inc., 271 NLRB 798 (1984); Laerco Transportation, 269 NLRB 324 (1984). Without such control, a company which contracts its labor force is not a joint employer of such workers – avoiding collective bargaining requirements and liability for violations of the Act.

While the review in Browning-Ferris Industries of California is pending, Griffin’s directive concerning McDonald’s USA shows that certain board officials see a sweeping change on the joint-employer standards. Griffin’s directive is not published and is not binding law, so his underlying analysis of this situation is unknown. However, the Teamsters in Browning-Ferris Industries of California have given insight into what is likely the prevailing thought-process:

“(T)he NLRB’s current standard for defining joint employer status makes it overly difficult to establish joint-employer status. The current test does not address the realities of the modern workplace, where facility operators frequently rely on labor contractors to supply workers, while retaining control over both their and their labor contractor’s workforce. The current standard allows contractors and facility operators to avoid, as a practical matter, the basic legal obligation to recognize and bargain with workers’ chosen representatives, because such employees cannot engage in meaningful bargaining when the party that exercises control and influence over their working conditions is not required to participate or bargain.”

Griffin’s directive with McDonald’s USA shows an apparent willingness to lump the franchisor/franchisee relationship into the labor contractor pool at issue in Browning-Ferris Industries of California. Thus, it is not a stretch to assume that the board’s joint-employer standard will be broadened, and that such standard will reach franchises of nearly all sorts, staffing companies and labor subcontractors. A broadened joint-employer standard would also give unions potentially more support and opportunity for growth. Combined with the board’s new micro-unit rules, unions who could not otherwise organize a geographically diverse workforce would be provided greater opportunities to organize employees across multiple locations, or in a limited number of job classifications, whichever gives it the best chance to succeed.

Businesses are wise to address this issue now – reviewing their labor structure and subcontracts for protections and indemnification – otherwise they may be surprised to learn “who’s the boss.”•

Andrew Gruber is a partner in the Labor and Employment Practice Group of Bingham Greenebaum Doll LLP out of its Indianapolis office. He can be reached at agruber@bgdlegal.com. The opinions expressed are those of the author.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

  2. Freedom as granted in the Constitution cannot be summarily disallowed without Due Process. Unable to to to the gym, church, bowling alley? What is this 1984 level nonsense? Congrats to Brian for having the courage to say that this was enough! and Congrats to the ACLU on the win!

  3. America's hyper-phobia about convicted sex offenders must end! Politicians must stop pandering to knee-jerk public hysteria. And the public needs to learn the facts. Research by the California Sex Offender Management Board as shown a recidivism rate for convicted sex offenders of less than 1%. Less than 1%! Furthermore, research shows that by year 17 after their conviction, a convicted sex offender is no more likely to commit a new sex offense than any other member of the public. Put away your torches and pitchforks. Get the facts. Stop hysteria.

  4. He was convicted 23 years ago. How old was he then? He probably was a juvenile. People do stupid things, especially before their brain is fully developed. Why are we continuing to punish him in 2016? If he hasn't re-offended by now, it's very, very unlikely he ever will. He paid for his mistake sufficiently. Let him live his life in peace.

  5. This year, Notre Dame actually enrolled an equal amount of male and female students.

ADVERTISEMENT