Restaurant Industry: Keep It Free from Union Organizing

Many people do not realize that 90 percent of the restaurants in the United States belong to independent operators or franchisees. Traditionally, business owners and union organizers have stood on opposite sides of the spectrum in relation to labor issues. The restaurant industry has for the most part remained free from big business constraints through small independent owners and the franchise system, which have also kept franchises free from union organizing. Since 1984, the franchise system drew clear distinctions between franchisee owners and franchises. For decades, the franchise model gave small business owners the advantage of resources to start new businesses while at the same time having the freedom to run the businesses themselves. The franchise expands the reach of the brand, while the franchisee manages daily business operations and personnel. Until recently, the National Labor Relations Board (NLRB) followed the tradition of viewing franchises and franchisees as separate in their legal responsibilities. While a disgruntled employee could sue the restaurant owner (franchisee), the franchise would not automatically be liable as well. In December 2014, the NLRB allowed several complaints, one against McDonald’s USA LLC and McDonald’s franchisees to proceed as a joint action, alleging unfair labor practice charges. However, McDonald’s USA LLC does not control labor relations at the franchised stores. The NRA opposes this change taken by the NLRB and is reaching out to Congress for legislation to curb the NLRB’s authority. The potential harm to business franchisees is as follows: Organized labor’s ability to unionize the restaurant industry by re-labeling franchise stores as big business Discouragement of small business owners to launch new businesses through franchises...

Are You an Independent or Joint Owner If You Own a Franchise Restaurant?

Author Stephen D. Hans For more than thirty years, a line was drawn that differentiated a franchiser and franchisee. The relationship between the two served each other well. Entrepreneurs looking to start a business found security in the franchiser relationship. The franchiser protected the brand and the franchisee made daily business operations thrive. A recent article in Investors.com describes a National Labor Relations Board (NLRB) determination regarding McDonald’s and its franchisees. The NLRB’s determination goes against the decade long defining rule that distinguished franchisers from franchisees. Traditionally, franchisees were considered independent owners. For years the NLRB adhered to its standard, which stated: “To establish joint employer status, there must be a showing that the employer meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.” In recent determinations the NLRB has found that the franchiser and franchisee are joint owners. Claims were brought against McDonald’s and the franchisees alleging on the part of both entities “discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activities,”. The result of this finding holds the franchiser responsible for the actions of the franchisee, which in the long term will probably make business less profitable for McDonald’s and therefore less attractive for franchisees. This major shift in NLRB policies favors unions in the ongoing conflicts between unions and independent business owners. Another case, the International Brotherhood of Teamsters against Browning-Ferris Industries  also has been brought before the NLRB. In this issue, Browning-Ferris Industries urges that the NLRB uphold its standard of treating franchisees as independent owners....

Case Law Is Still Catching Up with Social Media Technology

Author: Stephen D. Hans As case law catches up with social media technology, more information becomes available to develop sound business practices. A recent report by Bloomberg BNA  unveils worthwhile policies described by the National Labor Relations Board (NLRB) Acting General Counsel, Lafe E. Solomon. The report focused on unfair labor practices that limit employees’ abilities to exercise their federal labor law guaranteed rights. Mr. Solomon addressed large company business practices ─ Target, Walmart, and General Motors, to name a few. When reviewing the language used in employee handbooks and policies, he found: Overbroad confidentiality rules Unlawful reporting requirements Unlawful attempts to monitor tone or online communications content Legitimate bullying bans Vague rules that violated rights Valid rules restricting statements made in the employer’s name Rules that violated employees’ rights to seek help from third parties regarding their working conditions Valid rules prohibiting discrimination Walmart had a favorable outcome by revising its policy after a former employee had filed a complaint with the NLRB. Because Walmart’s new policy was lawful, the NLRB found it unnecessary to address the legality of the previous policy. The NLRB found that the employee’s online comments were not NLRB or work-related, which resulted in dismissing the claim. Successful aspects of Walmart’s revised policies included prohibiting discriminatory remarks, harassment, threats of violence, and similar inappropriate or unlawful conduct. The revised policy provided guidelines of being fair and courteous to other employees and encouraged direct open communication to co-workers rather than communicating complaints through social media postings. If you have questions about employment policy for social media, contact Stephen Hans at Hans & Associates, P.C. ....

National Labor Relations Board and Social Media Networking

Author: Hans & Associates, P.C. Technological advances like social media present their own unique legal problems and there is always a gap between innovative changes and laws catching up with them. The question arises as to what social media communications about an employer or employment situation are protected and considered concerted activity? Concerted activity involves employees airing grievances with each other about working conditions and employers’ treatment of employees. Under the law, employees have this right. But where is the line drawn between that activity and damaging an employer’s reputation? NLRB memorandum In January 2012, the National Labor Relations Board (NLRB) released a memorandum  addressing a number of social media cases within the past year. The memorandum notes one particular case where the NLRB ruled the employer’s termination was illegal. The employer terminated an employee for her comments on Facebook about her job change that she believed was unfair because she was the second highest producing sales employee and the employer shifted her to a different type of sales position that was less remunerative. Despite the fact that her discussion was on Facebook, airing grievances among employees was a protected activity. The employer had a rule that prohibited employees from disparaging the employer in any media and the NLRB found that rule to be unlawful. The NLRB also cited other cases were employee comments on Facebook legally warranted termination based on the nature of and the circumstances surrounding the communication. As an employer, it is wise to seek legal counsel before taking action toward employees who engage in work discussion using social media. Employment and social media networking is...

National Labor Relations Board (NLRB) Sued Again

Business Advocacy Groups Sue NLRB over New Posting Rule On August 30th, the National Labor Relations Board (NLRB) published its final rule requiring all private businesses within its jurisdiction to post a notice at the place of employment notifying employees of their rights under the National Labor Relations Act. In keeping with the contentious national environment surrounding recent NRLB actions, the agency and its members have been promptly sued by several business advocacy groups, including the National Association of Manufacturers, the National Federation of Independent Business and the U.S. Chamber of Commerce. Among other things, these lawsuits accuse the NLRB of failing to comply with proper administrative rule-making procedures when it promulgated the new posting rule. The lawsuits also assert that the new rule violates the First Amendment rights of businesses by compelling employers to engage in speech with which they do not agree. NRLB Response to Recent Lawsuits The NLRB has responded to these lawsuits by pointing out that the poster simply informs employees of their legal rights, just as similar required posters do with respect to other employment and labor laws, such as the Fair Labor Standards Act and federal and state anti-discrimination laws. The NLRB will likely prevail in the recent lawsuits, as these other posting requirements have held up to similar legal challenges in the past. Nonetheless, we will continue to follow these lawsuits with interest over the coming weeks. Unless Lawsuit Succeeds, Rule Effective November 14, 2011 Unless the lawsuits succeed in preventing the rule from taking effect —an unlikely scenario, covered employers will be required to post the NLRB’s notice starting November 14,...