Amy Blaisdell was interviewed by Fox2News regarding the Supreme Court’s decision in Young v. UPS, which addressed an employer’s obligation to accommodate women under the federal Pregnancy Discrimination Act. Additionally, effective 1/1/2015, Illinois has a new Pregnancy Fairness Law which places additional accommodation obligations on Illinois employers. Watch the interview.

By a 6-3 majority, the Supreme Court created a potentially new standard by which employers’ accommodations given or denied to pregnant women will be judged under the federal Pregnancy Discrimination Act (“PDA”).

In Young v. UPS, the plaintiff, Peggy Young, was deemed unable to work her part-time driver position once her physician placed her on a 20-pound lifting restriction. Young was placed on an unpaid leave, and returned to work after the birth of her child; however, Young subsequently filed a lawsuit against UPS alleging the company violated the PDA in refusing to accommodate her pregnancy-related lifting restriction and not assigning her to a light duty position. 

At the time, UPS allowed employees to work light duty only if the employee was injured or otherwise disabled on the job, if the employee lost his/her Department of Transportation certification or if the employee suffered from a disability covered by the Americans with Disabilities Act (“ADA”). At the time Young’s lifting restriction was imposed, Young fell within none of these categories.

Both the district court and the Fourth Circuit Court of Appeals ruled in favor of UPS, concluding that Young was not “similarly situated” to the categories of employees who were eligible for light duty. In presenting her case to the Supreme Court, Young argued that the PDA required employers to accommodate pregnant women if any subclass of employee with a debilitating condition was provided an accommodation. In contrast, UPS argued that an employer only had a duty to treat “similarly situated” employees similarly, and since pregnancy-related conditions were not similar to those categories of employees who were granted accommodations, no duty to accommodate existed.

The Supreme Court rejected both Young’s and UPS’s positions, and created its own standard. The Supreme Court interpreted “similarly situated” to mean “similar in their ability or inability to work.” Once an employee shows that her employer provided accommodation to others within this category, the burden then falls upon the employer to provide a legitimate, nondiscriminatory justification by denying accommodation to pregnant women while granting accommodation to other employees. Because no such analysis had been done by the lower courts, the Supreme Court remanded this case back to the Fourth Circuit for further review.

Importantly, the Supreme Court also rejected the Solicitor General’s argument that the Court should give special, if not controlling weight, to the EEOC’s 2014 Guidance concerning the application of Title VII and the ADA to pregnant employees. The Supreme Court noted, that the guidance “lacks the timing, ‘consistency’ and ‘thoroughness’ of ‘consideration’ necessary to ‘give it power to persuade’” under the Supreme Court precedent set forth in Skidmore v. Swift & Co., 323 U.S. 134, 140. The Court further noted that the guidance was promulgated after certiorari was granted; took a position on which previous EEOC guidelines were silent; was inconsistent with positions long advocated by the Government; and the EEOC did not explain the basis for its guidance.

In light of the Supreme Court’s decision, employers should reevaluate their policies and practices regarding the accommodation of pregnant applicants and employees. In particular, in comparing the accommodation of pregnant workers, it will be necessary to compare restrictions/limitations with those of other employees who are accommodated, rather than the circumstances giving rise to the medical condition. It is important to note that the EEOC’s 2014 Guidance will require changes in light of the Supreme Court’s decision and therefore is of limited utility. However, other legislation discussed in the EEOC’s 2014 Guidance, such as the 2008 ADA Amendments Act (“ADAAA”), which expanded the ADA’s protections to include conditions or complications related to pregnancy, will still need to be considered. The ADAAA did not apply to Young’s condition as it postdated her leave. If it had, then the ADAAA would likely have required provision of light duty as a reasonable accommodation. Further, several states, including Illinois have passed legislation requiring accommodation of pregnant employees. In fact, the Supreme Court, in its opinion, acknowledged that recent statutory changes could limit the future significance of its interpretation of the PDA.

If you have questions about the Supreme Court’s decision or your existing policies, please contact the attorneys in our Employment & Labor Group.

On February 5, 2015, Anthem Blue Cross Blue Shield (“Anthem”) announced that it was the target of a cyber attack that resulted in unauthorized access to Anthem’s IT system. As a result, certain personal information of Anthem’s current and former members may have been compromised. Information that may have been subject to compromise includes member (and former member): names, birthdays, medical IDs/social security numbers, street addresses, email addresses and employment information (including income data). In subsequent media coverage, it has been reported that up to 80 million individuals may have been impacted. It was also reported that information going back to the year 2004 may have been subject to the breach.

It is believed that the Anthem breach is the largest breach involving health information to date.

While Anthem has been providing individuals with information (often through communications with employers responsible for sponsoring the employee health plan), it is possible that under HIPAA, applicable state laws and ERISA, an employer maintaining an Anthem health plan may have legal responsibilities as a result of the Anthem breach. The purpose of this Special Bulletin is to summarize those responsibilities and to provide you with information to help ensure your organization meets those responsibilities.

HIPAA

Under HIPAA, a “covered entity” has certain reporting responsibilities (to the Department of Health & Human Services) and/or notification responsibilities (to affected individuals) in the event of a data breach involving health information. A health plan is considered to be a “covered entity” and while, according to HIPAA, a health plan is considered to be a distinct legal entity, it is generally the employer that sponsors the plan who has the responsibility for making such reports/notices in connection with the plan. Under HIPAA, a “business associate” does not have these reporting/notification responsibilities, however, these responsibilities may be delegated to the business associate by the covered entity under contract.

To understand whether your organization’s health plan has responsibilities for reporting/ notification as a result of the Anthem breach, it is necessary to review your plan documents. Generally, the responsibility of your health plan in responding to the Anthem breach will depend upon whether your plan is self-insured or fully-insured. If your plan through Anthem is self-insured, it is likely that Anthem is considered to be your plan’s business associate and the reporting/notification responsibilities rest with the plan and not with Anthem. If your plan through Anthem is fully-insured, again, depending upon the language in your Anthem plan, it is likely that Anthem is also acting as a covered entity and, as such, it is Anthem who has the reporting/notification responsibilities under HIPAA.

Bottom Line: If your organization sponsors a group health plan for your employees, you should review your Anthem agreements, including the business associate agreement, to determine whether, as plan sponsor, you are legally responsible for providing notice to affected individuals of the Anthem breach. If your organization does have notice responsibilities, you are responsible for providing notice “without unreasonable delay” and in no case later than 60 calendar days after discovery of the breach.

State Laws

In addition to HIPAA, there are 47 different states that have enacted data breach laws. While each state’s laws may have unique variables, generally, each requires certain organizations to provide notice in the event of a data breach. Notice may be required to a state Attorney General, a particular state department designated for consumer protection matters and to affected individuals. Based upon what has been reported regarding the Anthem breach, it is likely that under any of the 47 state laws, the Anthem breach would require notice. Some state laws provide that if you are in compliance with notice requirements under HIPAA, then you need to take no additional actions. Many states, however, do not contain this exemption. Since each state law is different, as the sponsor of a health plan, your organization may have notice responsibilities according to the particular laws of the state in which your organization is located and the laws of the states in which your employees reside.

Bottom Line: If your organization maintains a group health plan for your employees, you should review both the laws of the state in which your company is located as well as the laws of the states in which your employees reside to determine whether you are legally responsible for providing notice to affected individuals of the Anthem breach. 

ERISA

In addition to HIPAA responsibilities outlined above, your company may have responsibilities under ERISA. With the exception of plans maintained by churches, some church-related organizations and governmental entities, ERISA governs group health plans. ERISA imposes on plan fiduciaries certain obligations in connection with the administration and operation of ERISA-covered plans, including a duty to act prudently and to act in the best interests of plan participants and beneficiaries (the latter of which is part of the fiduciary duty of loyalty). ERISA fiduciaries are held to extremely high standards of conduct under the law.

An employer’s actions and authority with respect to a health plan, as well the plan’s governing documents, will determine whether an employer is a fiduciary of its group health plan. However, most employers that sponsor ERISA-covered group health plans are considered fiduciaries of such plans. As such, employers must consider what actions, if any, must be taken in response to Anthem’s data breach. By doing so, employers can help to ensure that their fiduciary duties of prudence and loyalty are fulfilled, minimize the risk of claims of breach of fiduciary duty, and protect themselves in the event of a lawsuit.

In addition to imposing fiduciary duties, ERISA “preempts” certain state laws to the extent that such laws relate to the administration of ERISA-covered plans. ERISA’s preemption can present challenges in terms of determining which laws must be observed and which do not apply.

In order to identify and fulfill their responsibilities under ERISA, employers should consider taking the following steps among others:

• Review plan documents and plan operations to determine who (including the employer) has fiduciary responsibility with respect to the group health plan.

• Determine how directly the breach will impact the plan. If the plan uses Anthem currently as its insurer or third-party administrator or has used Anthem in the past, the impact of the breach will be more direct than if the plan has never contracted with Anthem. The more direct the connection between Anthem and the plan, the more rigorous the fiduciaries’ process and actions must be.

• Analyze the interaction of state laws and ERISA’s preemption provision to determine the extent to which compliance with state laws is required.

• Review all information from Anthem to determine what steps it is taking as a result of the breach. Contact Anthem for more information to the extent needed to fully understand how the breach will impact the plan.

• Provide information to plan participants and beneficiaries that Anthem provides, to the extent that Anthem is not directly providing the information to such individuals. Ensure that the participants and beneficiaries at least have as much information as they need to protect themselves against possible consequences of the breach.

Bottom Line: If your organization maintains an ERISA-covered plan, you may have fiduciary responsibilities as a result of the Anthem breach in addition to HIPAA responsibilities.

Our attorneys are able to assist employers with every aspect of the Anthem breach, from HIPAA compliance to evaluation of ERISA fiduciary status and issues and the design and implementation of action plans in response to the breach.

As two federal courts recognized in February 2015, Illinois law is unsettled as to the duration of continued employment that is sufficient consideration to support a non-compete agreement. In Bankers Life And Casualty v. Miller¹,a February 2015 federal court decision applying Illinois law, the court held that there is no bright line test for the length of continued employment sufficient to support a post-employment restrictive covenant specifically rejecting the argument that employment less than two years is inherently insufficient consideration under Illinois law. And in Cumulus Radio Corporation v. Olson and Alpha Media, the court recognized that the Illinois Supreme Court would likely embrace the same sort of fact specific approach to assessing the adequacy of consideration that it applies to determine whether the restrictions are reasonable.

The Bankers Life decision highlights two problems inherent when the only consideration for a post-employment restrictive covenant is continued employment. First, there is uncertainty concerning the duration of continued employment sufficient to support such a restriction. Second, courts have held the duration of employment insufficient to support the restriction even where the employee quit to take a position with a competitor to compete in violation of the restrictive covenant. An employee may avoid post-employment restrictions by voluntarily taking a position with a competitor before he has been employed for a “sufficient” duration. The court in Cumulus Radio Corporation v. Olson and Alpha Media, underscored the illogic of the failure to give weight to the reason an at-will employee’s employment noting that allowing an employee to void the consideration by quitting for any reason at any time makes restrictive covenants voidable at the employee’s whim.

The approach taken by Illinois courts with respect to continued employment as the sole consideration for post-employment restrictions poses two challenges for employers relying on restrictive covenants to protect their businesses. First, what constitutes a “substantial” period of time sufficient to support an enforceable restrictive covenant in an at-will employment relationship under Illinois law is anything but clear. And second, the employee may be vested with too much control over whether the restrictions on post-employment competition will be enforced. The Illinois Supreme Court has not defined the length of employment sufficient to support a restrictive covenant. The majority of the federal courts that have attempted to predict how the Illinois Supreme Court would resolve the issue have concluded that it is unlikely that the Illinois Supreme Court will establish a bright line test.

An objective of post-employment restrictive covenants is to prevent an employee from taking an employer’s business assets that she obtained solely by virtue of her employment. A goal in drafting contracts is to limit transactional risk. Consequently, without addressing whether continued employment may provide sufficient consideration for an enforceable post-employment restrictive covenant, pragmatism dictates drafting such an agreement to reduce the uncertainty over whether the duration of continued employment is “sufficient” to support enforcement of the restrictions.

The transactional uncertainty inherent when post-employment restrictions tied solely to continued employment is a problem that can be prevented by tailoring the restrictive covenant to the specific employment relationship rather than leaving it an open-ended proposition. There are many different ways of addressing this issue, and there is no one size fits all solution. For example, an employer “pay” for the restriction by earmarking some portion of the compensation to be paid to the employee as payment for the post-employment restriction. This solution avoids the issues associated with tying the restriction to continued employment. Although this may avoid the issue of uncertainty, a downside of this approach is that in the event of a breach, the employee may argue that the amount paid for the restriction is the measure of the damages associated with breach. Alternatives include providing employment for a specific duration rather than on an at-will basis or tying the restriction to benefits to be conferred on the employee with the employment such as training. Best practices dictate an evaluation of the assets to be protected through the restriction and tailoring the contract, including the consideration for the post-employment restrictions, to that objective. And there is no time like the present to revisit your company’s post-employment restrictions to re-evaluate whether they need to be fine-tuned to better protect your business.

¹Bankers Life And Casualty Company v. Miller, Case No. 14 cv 3165, 2015 WL 5151965 (N.D. Ill. February 6, 2015). See Cumulus Radio Corporation et al v Olson and Alpha Media LLC, Case No. 15 CV 1067 (C.D.Ill. February 13, 2015)

Buyer beware as the asset protection afforded by non-disclosure and non-solicitation agreements signed by prospective purchasers may not survive the sale. This issue was addressed in a recent federal decision in Illinois offering some cautionary reminders for business buyers. In this case, Keywell LLC (“Keywell”) sought to sell its assets. Croniment Holdings, Inc. (“Croniment”), a bidder for Keywell’s assets, signed a non-disclosure agreement (the “NDA”) which prohibited Croniment from disclosing Keywell confidential information and prohibited Croniment from hiring any of Keywell’s employees with whom Croniment came into contact during negotiations. Keywell and Croniment entered into an asset purchase agreement by which Croniment would serve as the stalking horse bid for Keywell’s assets in bankruptcy.

Keywell filed for bankruptcy, but a third party other than Croniment prevailed and purchased Keywell’s assets. The bankruptcy court order authorized the sale of Keywell’s assets to the third party, but the order was specific that the sale was not a consolidation or merger and that there was no continuity of enterprise between Keywell and the third party purchaser. The third party purchaser did not assume any employment or similar agreements to which Keywell was a party.

After the sale, Croniment offered employment to two Keywell executives. The two Keywell executives had non-compete agreements that prohibited them from disclosing confidential information and from being employed by certain companies, including Croniment, for two years after the termination of their employment. Croniment filed a lawsuit that sought a declaration that the third party purchaser of Keywell’s assets could not enforce the NDAs and or the non-compete agreements. After the lawsuit was filed, Keywell assigned all of its rights under the NDAs and the two non-compete agreements to the third party purchaser.

The main issue before the court was whether the NDA and the non-compete agreements were assignable to the third party purchaser. Focusing first on the NDA, the court recognized that a non-disclosure agreement is essentially a restraint on trade and its validity and enforceability are analyzed in essentially the same way as if it were a covenant not to compete. Thus, the NDA and the non-competes were only enforceable if they protected Keywell’s legitimate business interests.

The court found that following the sale of its assets, Keywell had no interest in customers, confidential information, trade secrets, or in retaining a stable workforce. Those interests were all transferred in the asset sale. The assignment of the agreements after the sale was not effective because the sale terminated Keywell’s existing legitimate business interests effectively terminating those agreements. Therefore, the third party purchaser could not enforce any of the agreements.

When relying on NDAs and restrictive covenants, ensure that they provide the protections you require, and if you are relying on them as a business purchaser, confirm that those protections flow to you.

Reversing existing Board precedent, the National Labor Relations Board (“Board” or “NLRB”) recently ruled that employers that allow employees access to work e-mail systems must presumptively allow their employees to use those e-mail systems for union activity during non-work time. This reversal of long-standing precedent has potentially far-reaching consequences and, at minimum, will require both union and non-union employers to review their communications policies to ensure compliance with the National Labor Relations Act (“NLRA”).

The Board based its decision in part on the increasingly pervasive use of e-mail in the workplace and determined that e-mail has become a “natural gathering place” for employees to discuss work-related matters. Consequently, the Board found it must adapt its policies to the changing technological landscape of the workplace. Under the new standard, the Board presumes that employees who have access to their employers’ e-mails systems in the course of their employment may use those e-mail systems to engage in NRLA–protected communications on non-working time. An employer may ban the right to use its e-mail systems for non-work activity only by demonstrating “special circumstances” necessary to maintain production and by establishing the connection between the restriction and the interest it aims to protect. Importantly, the decision notes that a pre-existing policy banning employee use of work e-mail for non-work purposes does not constitute a special circumstance under the new rule. The Board anticipates that these special circumstances will only be present in “rare” cases but states that employers may nevertheless apply “uniform and consistently enforced” rules regarding use of work e-mail systems if necessary to maintain production and discipline.

This decision is limited in several important respects—chiefly in that the new rule applies only to those employees that have access to work e-mail systems. Employers are not now required to grant employees or nonemployees access to their e-mail systems where they have previously chosen not to. Furthermore, the decision does not aim to authorize employees to use work e-mail for union purposes during working time.

Despite these limitations, it is clear that this newly established rule will pose challenges for employers and will potentially open the door for subsequent challenges to restrictions on employee use of employer property for protected activities. Most troublingly, the Board’s decision expressly rejects the “supposed principle” that employers may prohibit employees from using employer equipment for non-work purposes. Furthermore, employee use of work e-mail systems for protected activities poses complications for employers that customarily monitor those communication systems for management purposes. Member Miscimarra’s dissent identifies additional consequences of the majority’s decision, including the erosion of the “work time is for work” principle, losses of productivity, and confusion regarding restrictions on access to work areas by off-duty employees.

In light of the NLRB’s newly articulated standard, employers are wise to reevaluate their policies related to e-mail use and consider whether any revisions are necessary for compliance. If you have questions about the NLRB’s decision or your existing policies, please reach out to our Employment & Labor Group.

What is the Illinois Pregnancy Fairness Law?

Effective January 1, 2015, the Illinois Pregnancy Fairness Law provides workplace protections to all expectant mothers, regardless of an employer’s size. The Illinois Pregnancy Fairness Law amends the Illinois Human Rights Act, adding “pregnancy” as a protected class under state law. “Pregnancy” is defined broadly to mean “pregnancy, childbirth, or other medical or common conditions related to pregnancy or childbirth.” Accordingly, effective 1/1/15, the IHRA prohibits discrimination on the basis of “pregnancy” against applicants and employees and also requires employers to provide accommodations to expectant mothers to enable them to perform the job the job held or sought unless the employer can establishing that doing so would cause an undue hardship on the ordinary operation of the business. The Illinois law also prohibits retaliation against individuals who exercise their right to an accommodation under the law.

What are the differences between the new Illinois law and federal law?

The new Illinois law applies to all employers regardless of size and not only prohibits them from discriminating against any woman coming within the broad definition of pregnancy, but also requires employers to provide accommodations to expectant mothers that are needed to perform the job held by an employee or sought by an applicant, unless the employer can establish that doing so would pose an undue hardship. In contrast, the federal Pregnancy Discrimination Act (PDA) is part of Title VII of the Civil Rights Act of 1964, and only applies to employers with 15 or more employers. In addition, it is not yet clear that the PDA requires workplace accommodations for pregnant women who do not have a condition that would constitute a disability under the Americans with Disabilities Act Amendments Act (ADAAA) of 2008. Although the U.S. Equal Employment Opportunity Commission issued guidance on July 14, 2014, opining that the PDA does require an employer to provide reasonable accommodations to all expectant mothers, this issue will actually be decided by the United States Supreme Court this term in Young v. UPS. Oral Arguments in the case are scheduled for December 2014.

Which employees are protected by the law?

The law applies to all women who meet the broad definition of pregnancy regardless of whether they work full or part-time. In addition, the accommodation requirement applies to any woman experiencing “pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth.” It is unclear whether the law would extend protection to a woman who is not yet pregnant but who is has a medical condition that impacts her ability to conceive.

What is a reasonable accommodation under Illinois law?

Reasonable accommodation is defined by the law to mean “reasonable modifications or adjustments to the job application process or work environment, or to the manner or circumstances under which the position desired or held is customarily performed, that enable an applicant or employee affected by pregnancy, childbirth, or medical or common conditions related to pregnancy or childbirth to be considered for the position the applicant desires or to perform the essential functions of that position.” The non-exclusive list of reasonable accommodations identified in the Illinois law are:

• more frequent or longer bathroom breaks, breaks for increased water intake, and breaks for periodic rest;

• private non-bathroom space for expressing breast milk and breastfeeding;

• seating;

• assistance with manual labor;

• light duty;

• temporary transfer to a less strenuous or hazardous position;

• the provision of an accessible worksite;

• acquisition or modification of equipment;

• job restructuring;

• a part-time or modified work schedule;

• appropriate adjustment or modifications of examinations, training materials, or policies;

• reassignment to a vacant position;

• time off to recover from conditions related to childbirth; and

• leave necessitated by pregnancy, childbirth, or medical or common conditions resulting from pregnancy or childbirth.

What is not required by the new Illinois law?

The new Illinois law does not require an employer to create a job, unless the employer does so or would do so for other classes of employees who need accommodations. In addition, an employer is no required to discharge any employee, transfer any employee with more seniority, or promote any employee who is not qualified to perform the job, unless the employer does so or would do so to accommodate other classes of employees who need it. As a practical matter, an employer will have to ensure that it is treating pregnant workers the same as it treats any other workers to which it provides accommodations, including workers who have experienced a workers’ compensation injury and workers who have a disability under the ADAAA.

What does undue hardship mean?

Undue hardship means an action that is prohibitively expensive or disruptive when considered in light of the following factors:

• the nature and cost of the accommodation needed;

• the overall financial resources of the facility or facilities involved in the provision of the reasonable accommodation, the number of persons employed at the facility, the effect on expenses and resources, or the impact otherwise of the accommodation upon the operation of the facility;

• the overall financial resources of the employer, the overall size of the business of the employer with respect to the number of its employees, and the number, type, and location of its facilities; and

• the type of operation or operations of the employer, including the composition, structure, and functions of the workforce of the employer, the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the employer.

The employer has the burden of proving undue hardship and this is a very high threshold that will be extremely difficult, if not impossible for large employers, who are already subject to the Americans with Disabilities Act (ADA) accommodation process. Under the Illinois law, the fact that an employer provides or would be required to provide a similar accommodation to similarly situated employees creates a rebuttable presumption that the accommodation does not impose an undue hardship on the employer.

What information can an employer request from workers requesting accommodations under the Illinois law?

Employers are limited to obtaining certain information in support of a request for accommodations under the new Illinois. Employers are permitted to request documentation from a treating health care provider concerning the need for the requested reasonable accommodation or accommodations to the same extent that documentation is requested for individuals with disabilities if the employer’s request for documentation is job-related and consistent with business necessity. However, employers may require only the following information, which individuals requesting an accommodation must provide:

• the medical justification for the requested accommodation or accommodations

• a description of the reasonable accommodation or accommodations that are medically advisable

• the date the reasonable accommodation or accommodations became medically advisable, and

• the probable duration of the reasonable accommodation or accommodations.

The law further requires the employer and employer to engage in a “timely, good faith, and meaningful exchange to determine effective reasonable accommodations.” Importantly, the law also prohibits an employer for imposing an accommodation on an employee that has not been requested or that has not been accepted by the employee. This provision has the potential to create significant issues for employers. One can easily envision a situation in which an expectant mother is rejecting accommodations that are actually sufficient to meet medical restrictions and reasonable to accommodate the worker. Yet, under the law, an employer will have to continue to engage in dialogue with the employee until the employee agrees to the accommodation.

What posting or publication requirements does the Illinois law impose?

It is a violation of the Illinois law if an employer fails to post or keep posted in a conspicuous location where notices to employees are customarily posted, or fail to include in any employee handbook information concerning an employee’s rights under the law. 

Today the Office of the General Counsel of the National Labor Relations Board (“NLRB”) took its next step in the investigation of labor practices within the McDonald’s franchise system and issued consolidated complaints against McDonald’s franchisees and the franchisor – McDonald’s USA, LLC on the theory that the franchisor is a joint employer with its franchisees. Consistent with General Counsel’s amicus brief in the Browning-Ferris matter that was filed this summer, the focus of the complaints appear to be on the use of technology and tools that allows franchisors insight and potential control over franchisee operations.

According to the NLRB website:

“Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of our Act. This finding is further supported by McDonald’s, USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions.”

The NLRB faces an uphill battle in seeking to consider franchisors joint employers with their franchisees. The Browning-Ferris amicus brief signals a desire to revise the joint employer standard under the National Labor Relations Act to a former, more permissive standard than the one currently applied by the NLRB. However, case law applying the old standard has found that franchisors of typical franchise systems are not joint employers with their franchisees. The case law, however, dates back to the late 70s and it appears that the NLRB is trying to look deeper to differentiate the franchise system of old with modern operations.

More information is available on the NLRB website: http://www.nlrb.gov/news-outreach/fact-sheets/mcdonalds-fact-sheet