Categories
Union Matters

Bye-Bye Franchisee

Bye-Bye Franchisee

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Union Matters on Monday, August 25, 2014.

The first “nail in the coffin” in doing away with the franchiser/franchisee relationship and jeopardizing a vast number of small business operators in this country (estimated at a little over 85% in the restaurant industry), has been “nailed” by the National Labor Relations Board (NLRB) General Counsel. Robert F. Griffin, Jr., who was sworn in for a four (4) year term as General Counsel of the NLRB on November 4, 2013 and, as an aside, was a NLRB member from January 9, 2012 through August 2, 2013, has issued notifications to various NLRB Regional Offices that they are authorized to proceed with forty-three (43) complaints of Unfair Labor Practices against not only the franchisees of the locus of the dispute but, as well, against McDonald’s, USA as a “joint employer.” While there were a vast number of complaints filed against McDonald’s franchisees and McDonald’s since November 2012 (a total of 181 complaints), in his own authoritative way, General Counsel Griffin has authorized not only the issuance of the aforementioned forty-three (43) complaints but continuing investigation of sixty-four (64) other cases by his office to see if complaints should issue in these cases.

It is extremely interesting to note that the General Counsel’s action runs parallel to the consideration by the NLRB in a separate and distinct matter (Browning-Ferris) as to whether or not the current standard used by the NLRB (currently legally separate and distinct business entities that in unison exert a significant and direct degree of control over employees and their essential “terms and conditions of employment” are considered as joint employers) should be changed. Under the approach being taken by the General Counsel, he wants to change that standard even though there is in place a very distinct and currently legally enforceable franchise agreement between McDonald’s and its franchisees that requires the franchisees to comply with certain requirements dealing with food purchases and preparation of foods to protect the McDonald’s brand, but cedes to the individual franchisees all control over hiring, firing, and determining the terms and conditions of employment of their employees.

While the directive of the General Counsel of the NLRB is not law and, in fact, does not have to be followed by the NLRB itself, it is indeed curious that it comes out in parallel to the current pending of the Browning-Ferris case. There may be other very serious issues for employers, be they a franchisor or franchisee, with regard to the actions of the NLRB General Counsel.

As everyone is well aware, there is afoot a ground swell of employee protests against McDonald’s and various other fast food entities for an increase in the minimum wage. This effort is being strongly supported by the Service Employees’ Union. Companion to this effort to increase the minimum wage through employee protests, the “all omnipotent President Obama” has seen fit to issue another of his numerous Executive Orders increasing the minimum wage for employees of all federal contractors. Are these merely concentric circles that are spinning on their own axis in the night with no connection? If any reader of this article believes that, the author has some real cheap land in Florida because it is under water!

There is no doubt in the mind of the author that should NLRB General Counsel Griffin’s approach on joint employer status gain traction, it will quickly be adopted by other federal governmental agencies (EEOC and USDOL Wage and Hour Division) with regard to their investigations of “joint employers.” Certainly the next few years of the Obama Administration and his “lap dog” appointees in all government agencies are going to be very interesting.

Questions? Contact Walter J. Liszka in the Chicago office at waliszka@wesselssherman.com or by phone at (312) 629-9300. 

Related Posts: Merry Christmas, and Happy New Year Employers, Life Raft For Multiemployer Pension Plans, Operating Engineers Local 150 Remains One of Northern Illinois Most Active Unions, No Recording Rules-NLRB Protected?

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Categories
Discrimination

Here Comes the EEOC!

Here Comes the EEOC!

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Discrimination on Sunday, August 17, 2014.

As most private employers are well aware, numerous federal and state government agencies conduct on-site investigations and have been doing so for a long period of time [for example, Occupational Safety and Health Administration (OSHA inspectors) and United States Department of Labor (USDOL inspectors)]. Soon to be joining this array of “government visitors” is the Equal Employment Opportunity Commission (EEOC). The EEOC is engaging in a new and more aggressive investigation strategy. It will no longer accept an employer’s Position Statement at face value and is now demanding on-site visits to interview witnesses and gather information. It is the opinion of the author that these “on-site visits” are merely “fishing expeditions” conducted by the EEOC to gather any and all harmful information it can find out about an employer, be it for the case at issue or to develop a bigger case in the future. Suffice it to say that during these investigations, the EEOC representative will do everything he/she can to “bait the hook” and catch the biggest fish.

Obviously, these EEOC on-site investigations offer very little benefit to an employer. A wise employer must be prepared for this scenario and preparation should follow at least the following concepts:

  • The EEOC investigator will want to have a tour or walk-around of the employer’s facility which is the alleged sites of the alleged discriminatory activity referenced in the Charge of Discrimination. The wise employer will make absolutely certain that all required federal and state employment law posters are posted and readily available and viewable by employees. The wise employer will also “protect itself” from obvious violations of laws administered by other federal agencies (for example, OSHA safety regulations) because it is a well-known fact that government investigators from one (1) agency who have no authority to enforce a law or statutory responsibility will pass on the alleged violation to their compatriots in the agency that does enforce that law. It is an absolute necessity that the EEOC investigator be accompanied at all times on the tour by a designated employer representative. The chosen individual should be familiar with the facility and comfortable in representing the employer in dealing with the investigator.
  • The EEOC investigator will, in all probability, come for the on-site investigation after the employer has filed its written Position Statement and/or provided any requested evidence. The investigator will question witnesses, both rank-and-file and management personnel, to see if the stories match the Position Statement. That being the case, it is an absolute necessity that any management personnel who have any involvement in the alleged discrimination claim review the Charge of Discrimination and the company’s written Position Statement and any evidence provided so they can familiarize themselves with the case and not jeopardize the employer’s presentation by a contrary or ill-timed response. Any management personnel who have no knowledge or involvement in the Charge at issue should clearly tell the investigator they are not involved in the matter!
  • The EEOC investigators will “grill” any Human Resources representative with regard to his/her general knowledge of employment laws, potentially his/her educational training, and what training is provided to management personnel and rank-and-file employees with regard to discrimination and harassment. The old adage, “ignorance of the law is no excuse,” is extremely important with regard to Human Resources representatives. They should be extremely knowledgeable of anti-discrimination laws and the employer’s obligations under those laws. If, for example, there is no Human Resources representative on-site, the employer should have in place someone in the management ranks at that facility who is knowledgeable about Human Resources issues and can accurately identify the individual within the employer’s organization whom that person contacts for guidance and training in Human Resources issues.
  • Whomever the designated representative is of the employer who escorts the EEOC investigator and is present during interviews of management personnel should be doubly knowledgeable about the employer’s written Position Statement and any evidence presented in its defense to the Charge. If, for example, the EEOC investigator is slanting questions in a certain way to draw a harmful response or, in the alternative, is totally ignoring the employer’s presented evidence, this person should bring that to the attention of the EEOC investigator to make sure that a “complete and accurate record” is developed.

The employer must also consider whether or not it wishes its counsel who is representing them in the EEOC matter, to be present for the on-site investigation. While some readers of this article will view this comment as the author’s attempt to sell an employer on bringing its attorney on-site and therefore engendering larger attorney’s fees, the old adage of “penny wise, dollar foolish” may come into play. Counsel certainly will be skilled in how to deal with the investigator and probably better able to control/direct the investigation.

It is obviously the choice of the employer as to how to proceed with regard to any EEOC investigation and certainly how to proceed with regard to an on-site investigation. Good preparation and strategies are important in this regard. Certainly the EEOC investigator will be “baiting their hook” to catch the biggest fish. If an Employer wants to win and avoid prolonged problems with an EEOC Charge, it will make sure that all of the potential fish have been well fed prior to the EEOC investigator’s arrival and are able and willing to avoid the bait.

Questions? Contact Walter J. Liszka in the Chicago office at waliszka@wesselssherman.com or by phone at (312) 629-9300. 

Related Posts: “OK, Boomer!”, Seventh Circuit Decision-Use Of The “N-Word”, He Who Hesitates May be Lost, What Happens if a Current or Former Employee Files a Charge of Discrimination with the Illinois Department of Human Rights (IDHR)?

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