A roundup of workplace trends and legal developments to keep HR ahead of the curve
The National Labor Relations Board is at it again and this time, it may just have rocked the entire business world. On August 27, the NLRB ruled that franchisors can be held liable as a “joint employer” for labor violations committed by franchisees.
This is a huge development for franchise businesses and their HR departments, together with independent contractors and the companies that hire them. The ruling potentially undermines decades of precedent and legislation protecting franchisors. Without protection between franchisees and franchisors, this ruling potentially threatens the very business model upon which franchises are built.
Ultimately, if the NLRB has its way, major franchises may have to assume responsibility for HR and compliance down to the franchisee level, if not otherwise face significant contraction of their operations. To illustrate, McDonald’s currently has about 14,000 restaurants in the U.S., of which only 1,500 are actually company-owned. If the fast-food chain were forced to bring all of those restaurants under one single HR umbrella, well, that’s one big onboarding project…
Speaking of McDonald’s, it just ended its relationship with a factory farm after video emerged of stunning animal cruelty. The video was released during what has been a trying year for McDonald’s, having dealt with employee strikes and protests regarding its low hourly wages, and low forecasts for its future business outlook.
Uber has escaped its fight with New York City and Mayor DeBlasio for now, but it remains firmly in the city’s crosshairs. Originally, NYC planned to place a cap on Uber’s growth, but that will wait as NYC performs a four-month study on the impact Uber has on traffic and the heavily regulated NYC taxi and limousine services.
In the meantime, the California HR heat remains on the country’s fastest growing for-hire service. San Francisco District Attorney George Gascon expanded the pending consumer safety lawsuit against Uber to claim that Uber failed to uncover the criminal records of more than 25 California drivers, including several registered sex offenders and a convicted murderer.
That is in addition to the pressure Uber continues to face in California (despite its Silicon Valley origin), where the California Labor Commissioner ruled that Uber drivers are “employees” and where the company was ordered to pay a fine of $7.3 million for violating disclosure regulations.
Sadly, seven-figure penalties are common for large companies that make HR mistakes. Minneapolis-based Target has agreed to pay $2.8 million to thousands of rejected job applicants who claimed they were unfairly screened out of upper-level management jobs due to their race or gender.
As part of its investigation, the EEOC examined claims made by a class of applicants who applied for jobs at Target. It then entered into an agreement with Target, which is also required to hire an experienced outside consultant to monitor recordkeeping pertaining to medical examinations and to analyze potential “disparate impact” discrimination.
Back in the California HR minefield, Nestle is also in hot water due to a lawsuit alleging it used “slave-caught fish” in its Fancy Feast cat food, demonstrating the importance of vetting your vendors.
Worse yet, Bumble Bee Tuna was ordered to pay $6 million for a gruesome worker death, which is the largest-ever payout for a single victim of a workplace safety incident in California. The settlement includes $3 million Bumble Bee must spend to purchase new (safer) equipment, $1.5 million in fines and penalties and $1.5 million to the victim’s family. Bumble Bee would probably benefit from proactive safety training as well.
Over on the East Coast, the 3rd Circuit (PA, NJ and DE) ruled that a paid suspension pending the outcome of an internal investigation does not automatically qualify as an “adverse employment action” under Title VII.
This ruling follows precedent in the 2nd, 4th, 5th, 6th, 8th and 9th Circuits, all of which permit employers to use paid suspension as a legal means of separating employees pending the outcome of an investigation. Unfortunately, this type of suspension may be the safest way to protect alleged victims of things like sexual harassment and bullying from retaliation in the workplace, something which employers are obligated to do under the law.
ESPN’s Adam Schefter briefly felt what it’s like to be fired without prior notice or explanation in the 21st Century. ESPN’s crack IT team accidentally “bricked” Schefter’s phone, leaving the football gossip maven thinking he’d been canned. Seems like a good opportunity to reinforce proper termination protocol.
The EEOC’s portal for annual EEO-1 reporting is open. Organizations with 100+ employees, or those owned by or “corporately affiliated” with companies that have 100+ employees, together with federal government contractors and subcontractors, are required to create and file EEO statements by September 30, 2015. If only there were a checklist for that sort of thing…
We leave you with Edwin Starr’s “War” (What is it good for? Absolutely Nothing.). Tell us how you think this funk classic is relevant to HR in the comments below.