The agency chapter of the Business Associations casebook I co-author with Bill Klein and Mark Ramseyer relies heavily on cases involving franchise relationships. Is the franchisee an agent of the franchisor? If the franchisee a servant or independent contractor of the franchisor? And so on.
The franchise cases can be problematic, because franchising is such a unique form of business relationship. As of this morning, however, I can't help wondering if the NLRB ruling that McDonald's and its franchisees can be treated as joint employers will affect the way we teach these cases?
McDonald's Corp. could be treated as a joint employer with its franchisees in labor complaints, according to a National Labor Relations Board legal determination that could have far-reaching implications for how restaurant companies deal with their workers.
The decision by the NLRB's general counsel, announced on Tuesday, came in response to complaints alleging that McDonald's and its franchisees violated the rights of employees involved in protests against the company.
McDonald's vowed to fight the decision, which business and labor groups both said could set a precedent for restaurants and retailers that rely on franchising. ...
Allowing companies to be treated as joint employers with their franchisees could crimp their ability to claim that they aren't responsible for the labor actions of those franchise partners, making companies like McDonald's more vulnerable to campaigns by labor groups for higher wages and improved conditions for restaurant and retail workers.
"This legal opinion would upend years of federal and state legal precedent and threaten the sanctity of hundreds of thousands of contracts between franchisees and franchisors," said Steve Caldeira, chief executive of the International Franchise Association, who called the decision "wrong and unjustified."
At the moment, the decision probably doesn't require Business Organization teachers to do anything. It may not hold up to court challenge. If it does hold up, it will initially be just a factor in NLRB cases. But might it not bleed over into employment law, especially employment discrimination? And might it eventually bleed into agency law?