As I mentioned in a recent post, “SEIU Fights Its Own Unionization,” the Service Employees International Union has been behind the push at the National Labor Relations Board to extend joint employer status to franchisors, like McDonald’s (meaning that McDonald’s would be deemed an employer of its franchisees’ employees). And now, it is further extending this push – to the Equal Employment Opportunity Commission. On October 5, 2016, (as first reported by The Guardian) Fight for $15 (which is backed and funded by SEIU) announced that it had helped 15 McDonald’s employees (who are also Fight for $15 activists, unsurprisingly) file charges with the EEOC, claiming that they had been sexually harassed by their employers. Apparently only one of the charges was filed against a corporate McDonald’s store – the rest were filed jointly against franchisee stores and McDonald’s Corporation.
Whether a franchisor can be considered to be a joint employer of its franchisee’s employees has become a moving target – and it seems to be moving in a direction that is not favorable to franchisors. As I previously explained, for many years, the NLRB had found that franchisors were not joint employers with their franchisees. But this changed in 2014, when the NLRB’s General Counsel announced that he was filing complaints against McDonald’s franchisees and naming McDonald’s Corporation as a joint employer. In line with this shift, in 2015, the NLRB issued its landmark decision, Browning-Ferris Industries of California, in which it overhauled its decades-old test for joint employer status. Although the Browning-Ferris case involved the relationship between a staffing agency and a host employer, the test would appear to be equally applicable to a franchisor-franchisee relationship.
In Browning-Ferris, the NLRB held that two or more employers are joint employers of the same employees if they “share or codetermine those matters governing the essential terms and conditions of employment.” The first question in applying the standard is “whether there is a common-law employment relationship with the employees in question.” If so, then the next question is whether the “employer” in question “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.” The Board specifically stated that it would no longer require that the employer actually exercise such authority to control the terms and conditions of employment; the mere possession of this authority is sufficient to support a finding of joint employer status. In addition, the Board rejected the requirement that this authority must be exercised “directly and immediately.” Instead, it may be exercised indirectly, through an intermediary (such as the staffing agency or franchisor).
Browning-Ferris has appealed this decision to the U.S. Court of Appeals for the D.C. Circuit. What is particularly interesting is that the EEOC filed an amicus brief in that case – supporting the NLRB’s revamped and loosened standard for finding joint employer status. The EEOC argues that the NLRB’s test is essentially the same as its own (flexible) test for joint employer status: in essence, a fact-specific inquiry that looks at the totality of circumstances and turns on whether the putative employer has the right to control, either directly or indirectly, the employees. Notably, the EEOC cites its own administrative decisions to support the notion of indirect control; it does not refer to any federal court caselaw.
Apparently seizing upon this lead from the EEOC, Fight for $15 has orchestrated the EEOC charge filings that were announced this week, and a subsequent series of protests against (alleged) sexual harassment by McDonald’s. It will be up to the EEOC to determine, in fact, whether McDonald’s will be deemed a joint employer under Title VII with respect to these charges – and therefore subject to Title VII liability for any sexual harassment that occurred against the franchisee employees. Based on the amicus brief, I believe the EEOC will jump on this opportunity to find joint employer status.
It would seem that SEIU is seeking to solidify the expanded joint employer test across federal agencies – beyond the scope of the NLRB. But why? For one thing, by capturing large employers like McDonald’s under the joint employer umbrella, SEIU can force them to the bargaining table alongside the intermediary employers (like franchisees and staffing agencies). But there is a more indirect but no less significant purpose. According to my partner and labor guru Mike McGuire, at its roots, SEIU is a labor union, with the ultimate goal of organizing employees and expanding its membership. Unions have been unsuccessful in organizing McDonald’s and other fast food providers through the “traditional” method – building employee support for unionization from the bottom up. Therefore SEIU (and other unions) resort to “top down” organizing strategies, seeking to apply pressure on company leadership by filing NLRB, EEOC and other charges with government enforcement agencies, publicity campaigns, and perhaps consumer boycotts. The ultimate goal is to generate enough adverse pressure that management may capitulate and agree to some sort of labor peace agreement that would permit the union an easier path towards organizing the employees. Such an agreement may include access to its employees, management neutrality, and card check recognition. In return, the union would discontinue the pressure tactics mentioned above, and indeed may support the company’s image as a fair employer.