Roger K. Crawford

Crawford has focused in recent years on representing California franchisees in a high-impact case before the National Labor Relations Board. At issue has been the business model under which companies such as McDonald’s Corp. assign operations to independent business operators, and then extend to which the parent company has liability for its franchisees’ conduct.

The massive case has become perhaps the most prolonged, costly and complicated matter in NLRB history, with 150 days of testimony, hundreds of exhibits and a unique case management order that allowed far-flung parties the option of reviewing transcripts of testimony in lieu of attending hearings and deferring objections and cross-examination, if desired, to a later date. McDonald’s USA LLC, a Joint Employer, 02-CA-093893 (NLRB, filed Nov. 29, 2012).

Crawford said the case, in which a proposed but contested settlement is currently before an administrative law judge, is reminiscent of another set of labor law cases that attack the independent contractor model. “There’s a similarity to the independent contractor gig economy cases,” he said. The fundamental question is whether companies are accountable for franchisees’ alleged labor law violations.

Corporate lobbyists argue that a ruling against McDonald’s would harm the franchising model by making franchisers vulnerable to lawsuits and forcing them to bargain with unions representing franchise workers.

The proposed settlement would offer suing franchise employees back pay and offers of reinstatement, but it won’t resolve the underlying issue, because it contains a non-admission clause regarding the joint employment allegations, Crawford said.

“But the NLRB could resolve it otherwise,” he added. “They have indicated they will be proposing a rule of implied indirect authority between corporations and their franchises.” That plan took a hit last winter when a new Republican majority on the labor relations board held that only companies with direct control over workers can be considered joint employers.

Then that pullback itself was called into question when the board held its own ruling was invalid because the new NLRB member had a conflict. “Eventually, you’ll see that the current board will overthrow the rule and hold corporations liable only if they have direct and immediate control of their franchises,” Crawford said.

Because the Service Employees International Union and their affiliates are objecting to the proposed settlement, there is no timetable for the administrative law judge to decide whether to ratify it, Crawford said. “The unions want a ruling on the merits. It is complex in many ways.”

— John Roemer