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Joint Employer Issues in Employment Cases Against Franchises


An important, and often tricky, aspect of employment discrimination claims is determining the existing employee-employer relationship. In order to properly bring an employment discrimination claim under Title VII or any other anti-discrimination statute, you must identify the employer that falls under the coverage of those statutes. In some cases, you may be faced with a “joint employer” situation, which can be a challenge. A recent sex discrimination case against a popular fast food franchise raised this very issue.

Recent sex discrimination case against McDonald’s

In October 2016, fifteen McDonald’s employees in eight states filed sexual harassment complaints with the Equal Employment Opportunity Commission. Nearly all of those alleged harassment in locations operated by franchisees. However, all fifteen complaints named the national chain as a joint employer. The claims against the supervisors and managers ranged from inappropriate comments to nonconsensual touching.

Bringing a sex discrimination claim requires identification of the correct employer

Federal law, specifically Title VII, prohibits discrimination in the employment context based on sex or gender. The definition of “sex discrimination” has expanded to include sexual harassment and pregnancy discrimination. Generally speaking, a sexual harassment claim requires demonstrating that your employer should be held liable for the discrimination you endured based on one of two theories. You can either show that your employer is directly liable for the actions of a manager or supervisor, or liable for the actions of a co-worker because it knew of the conduct but failed to address it. Nevertheless, you cannot prove liability until you establish that there was an employment relationship.

Common issues in determining the employer-employee relationship

The most common situation where employer-employee relationship issues arise is when an employee receives a paycheck from one business but actually works at the site of another business. This usually happens when there is a contract between the two businesses to provide workers on a job site. The question becomes – which company is the employer? Is it the one that issues the paycheck or the one that directs the daily work duties of the employees?

Another common situation is the franchise business, as was the case in the sex discrimination lawsuit against McDonald’s. While an employee might appear to be employed by a national chain of restaurants or stores, such as McDonald’s, they are actually employed by the local company that owns and operates the franchise. In those cases, the franchise owner has an agreement with the larger chain. But the question remains whether the larger company exercises any control over the conditions of employment and, if so, to what extent?

What is the “joint employer” doctrine and when does it apply?

The “joint employer” doctrine is a legal theory that permits courts and regulatory agencies to treat multiple businesses as a single or “joint” employer when it comes to applying and enforcing employment laws. An obvious benefit of establishing a joint employer relationship is that the employee may be able to pursue his or her claims against both “joint” employers. As damages may include back pay, attorney fees, compensatory and punitive damages, all of which can be quite substantial, recovery can be greatly enhanced.

If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced employment law attorneys at Michel | King. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!

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