Republicans query U.S. labour board on McDonald's liability view

Say board is trying to 'rewrite the rules' around franchises
By Mica Rosenberg
|hrreporter.com|Last Updated: 09/18/2014

(Reuters) — Two Republican lawmakers on Wednesday asked a U.S. labour agency for more information about a recent finding that fast-food chain McDonald's Corp could be held liable for the labour practices of franchisees, a view that has alarmed many businesses.

The lawmakers said the Democratic-controlled National Labor Relations Board (NLRB) is trying to rewrite long-held rules governing labour relations between parent companies and franchises that are run as independent businesses.

The questioning comes just as fast-food workers are staging nationwide protests to push for higher wages, in a major union-led organization drive.

NLRB General Counsel Richard Griffin announced in July that the world's largest restaurant chain could be held liable for alleged labour law violations at franchised restaurants. Until now, McDonald's and other companies that make wide use of franchisees and contract employers have been insulated from such liability by the NLRB's "joint employer" standard.

U.S. Representatives John Kline and Phil Roe, in a letter to the agency, called the NLRB general counsel's finding "unprecedented" and asked the board to provide more documents by the end of September about its decision-making. The two Republicans are on the U.S. House of Representatives workforce committee.

"Our question is, what problem are you attempting to fix? We know that the franchise business model works well," Roe said in a telephone interview.

The NLRB said it had no comment on the letter, which was being reviewed by the Office of General Counsel.

The board announced in April that it was considering changing the 30-year-old standard and asked interested parties to weigh in. The board has yet to make a decision.

Griffin's brief announcement in July related to 43 complaints lodged against McDonald's and was just a first step in a long process for handling charges filed by workers with the NLRB. McDonald's has said it will contest the action.

Several owners of small franchise chains testified at a congressional hearing last week that any permanent shift in the board's policy could lead to more meddling in their operations by parent companies.

Catherine Ruckelshaus, an attorney at the National Employment Law Project, a low-wage workers advocacy group, said in a phone interview that changes in NLRB standards are needed to adapt to the modern workplace. "Everyone is pointing fingers at everyone else and no one is being held accountable or responsible."

In a separate hearing on Wednesday, House Republicans criticized the Obama administration's Equal Employment Opportunity Commission (EEOC) for "harassing" employers with unsubstantiated charges.

Republican Representative Tim Walberg said in a statement some "employers have fallen under EEOC's intense scrutiny without any allegation of employment discrimination." Walberg is pushing for legislative proposals for more EEOC oversight.

Michael Foreman, director of the Civil Rights Appellate Clinic at Pennsylvania State University's Dickinson School, said the proposals would hamper the EEOC's ability to enforce the law. "There's no pattern of EEOC abuse," he said.

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