Ninth Circuit Case Highlights Continuing Uncertainties Regarding Joint Employer Status

February 02, 2018

In a case that could have significant implications for employers on the West Coast, the Ninth Circuit is considering whether to revive a class action alleging a joint employment relationship between McDonald’s and eight franchise restaurants accused of wage violations.  Although the employees have settled with the franchisee, three employees, on behalf of a proposed class of 1,200 are now contending that McDonald’s should also be held liable as their “employer” as well.  This contention comes despite two district court rulings that McDonald’s is not responsible as a joint employer for violations of labor laws because it does not control the wages and working conditions of its franchisees’ workers.  A brief filed by the U.S. Chamber of Commerce notes that by “challenging the longstanding laws about what it means to be an employer, plaintiffs seek to destabilize California businesses and upend one of the most successful and common business models in California.  By burdening the franchisor with the obligations of the franchisee to its employees, plaintiffs seek to strip the franchise model of its viability.”