In Salazar v. McDonald’s Corp., the plaintiff argued that McDonald’s, a franchisor of fast food restaurants, was liable for wage and hour violations as a “joint employer” of its franchisees’ employees. Last week, a panel of the federal Ninth Circuit Court of Appeals rejected that argument.
The court relied on the California Supreme Court’s 2014 decision in Patterson v. Domino’s Pizza that held that a franchisor can be a joint employer “only if it has retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee’s employees.” The plaintiffs were unable to show that McDonald’s, at the national level, exercised such “control” over store level employees in California.
This case is a blow to unions and class action activists who have argued to expand the definitions of “employee” so as to facilitate collective bargaining and mass liability. The case also seems to put to rest, for now, the notion that the California Supreme Court’s 2018 decision in Dynamex, and recent confirming legislation that distinguishes “independent contractors” from employees, can also be used to undermine the “joint employer” analysis established by the Supreme Court in Patterson.