Thursday, September 4, 2014

Chain Restaurant Franchisee vs Franchisor Debate

There has recently been an increased media presence around chain restaurants and their labor practices versus an agenda proposed by the Obama administration and the National Labor Relations Board. We personally, being an independently owned and operated restaurant, don't really have much interest what happens with a particular chain or any ruling that may effect them. And we are certainly not here to argue for either side, because both sides of the argument could propose a limitless amount of reasons to support their cause. In a previous newsletter we had discussed the position that the National Restaurant Association has taken against this agenda and why. It now seems that the battle has really begun heating up and it will be a worthwhile follow and will be very interesting to see what the outcome is. 

In the most recent ruling, which fell in favor of the chain restaurant industry, the California Supreme Court rejected the idea proposed by the Obama Administration that franchise companies are the employers of the workers whom are actually hired, fired and managed by independent stores. Their ruling follows the ruling of many other states but goes against the agenda of the Obama Administration. 

The courts overturned a ruling that said Domino's should face a jury because one of their independent store operators was charged with sexual harassment. There you have one person, in one store, and they want to go after the entire operation. Doesn't quite seem fair. Also not fair... that any person has to deal with sexual harassment.  And that is where the great debate begins. Who is responsible, and who compensates for the mistreatment? There is also a ruling out there that makes McDonald's the general employer of the franchise, making them responsible for the unfair labor practices against striking workers at individual stores. 

I do believe that it is wrong for the mistake of one person in charge of one store in one town to bring down an entire chain of restaurants, which, in my opinion would be one of the goals of the Obama and NLRB agenda. They want the big money for the mistake of one small person. Not everything, in my opinion, can be made so simplistic. I do, however, feel that there is room for improvements in how these situations involving harassment, pay and other labor issues could be resolved. Those improvements should be met with compromise without completely dismissing the concerns of current chain restaurant employees or turning the entire industry upside down.

This issue is just beginning to scratch the surface and has the makings of a long fight ahead: Employee vs Franchise. It will be a very interesting battle to watch. So far the states are ruling against the Obama Administration agenda, and we will see how this story continues to unfold. Stay tuned!

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