• Testing the “Joint Employer” Waters
  • May 14, 2015
  • Law Firm: Pessin Katz Law P.A. - Towson Office
  • PK Law recently reported on the filing of a complaint by the General Counsel for the National Labor Relations Board (“NLRB”) against McDonald’s Corporation to the effect that McDonald’s was a “joint employer” with its franchisees and could be held liable for intimidating or terminating workers for union activities or protesting low wages. Now, one of the first “private” actions to test that theory has surface in the United States District Court for the Western District of Virginia in Betts, et. al. v. McDonald’s Corporation, et. al.

    The plaintiffs in the lawsuit are nine African-American and one Hispanic workers. They were longtime employees of McDonald’s during which time they claimed they were subjected to “rampant racial and sexual harassment” by supervisors at three restaurants as well as “wrongful termination” by the defendants. The defendants are McDonald’s, Soweva Company and Michael Simon. The franchise owner of the restaurants is Soweva Co. whose sole shareholder and “highest ranking manager”, according to the lawsuit, is Michael Simon.

    The workers allege that they complained to McDonald’s Corporation about their treatment, but that the Corporation did nothing to address their complaints. The 41 page complaint filed in court describes the alleged pervasive nature of control McDonald’s exercises over its franchisees. That control, the lawsuit contends, is sufficient to warrant McDonald’s liability for the acts of its franchisees.

    Lawsuits against McDonald’s are pending in other jurisdictions. The common theme of those actions, much like the NLRB General Counsel’s complaint, is that the “McDonald’s system” represents a degree of control over franchisees that is tantamount to an employer-employee relationship with the franchises’ employees. The result of such an arrangement with its franchisees is one of “joint” employment by McDonald’s and the franchisee.

    PK Law will continue to monitor these cases for further developments in its maintenance of its active labor and employment practice. PK Law’s Labor and Employment Group stands ready to answer questions regarding employment issues including wage and hour, discrimination and wrongful termination claims and defenses.