(Bloomberg) — The National Labor Relations Board determined that McDonald's Corp. is a joint employer with the owners of its restaurants, a decision that threatens to shake up the decades-old fast-food franchise system.
The NLRB's general counsel found that McDonald's has enough power over its individual franchises that it should be considered an employer, according to representatives for plaintiff lawyers in the case. McDonald's confirmed that it had been notified of the decision today.
The U.S. fast-food industry is largely franchised, meaning independent businesspeople own and operate the restaurants. They pay a percentage of their sales to the parent corporation, which manages the brand and image. McDonald's U.S. locations are about 90 percent franchised, and the company says it has a hands-off approach to how employees are managed. If McDonald's is considered a joint employer, it may have to police its franchisees more closely to prevent labor infractions.
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