Clarion Group Advises Food Service Employers of New, Evolving Employment Laws

September 3, 2014




Companies, colleges and others who have outside contractors operating their on-site food services should beware of the risks they face in the rapidly evolving arena of employment law advises Tom Mac Dermott, FCSI, president of food service consulting firm Clarion Group.

The widely publicized finding of the National Labor Relations Board General Counsel that McDonald’s is responsible for the employment actions of its franchisees is a warning, Mac Dermott says.

The NLRB’s General Counsel has “found merit” in charges that McDonald’s and some of its franchisees “violated the rights of employees,” according to a NLRB press release.  “If the parties cannot reach settlement in these cases, complaints will issue and McDonald’s USA LLC will be named as a joint employer respondent.”

“Another warning comes in the NLRB’s current consideration of the relationship between companies and on-site contractors,” Mac Dermott says.  The case involves a company and its on-site service contractor.  A union is trying to have the company declared a joint employer who must participate in collective bargaining with its contractor.  The case is pending.     

 “If these views stand,” Mac Dermott adds, “it isn’t a far reach to see how an organization can be held responsible for the employment actions of food service and other contractors on its premises.”

 “The U.S. Department of Labor, other regulators and labor unions have long tried to tie the host company or institutions to its service companies’ employees as a joint employer,” he noted.  “Sometimes, the host has made it easy to be linked – and held responsible financially – for actions over which it has, at best, only indirect control.”

The NLRB defines joint employment as when “two entities . . . share or co-determine those matters governing the essential terms and conditions of employment [including] matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.”

When an organization requires its onsite food service contractor to submit candidates for key management positions and makes the selection itself, it’s opening the door to a finding that it is a joint employer, according to Mac Dermott.

Other actions companies and others often take that can lead to a finding that it is a joint employer with its on-site contractor, Mac Dermott says, include:

· Negotiating with the contractor over the wage rates, pay raises and benefits the contractor offers its employees working on the premises.

· Directing the contractor to promote, demote, transfer or take another action affecting one or more of the contractor’s employees.

· Telling the contractor what hours its employees should work, rather than what hours of service to provide.


· Paying bonuses or making other payments to the contractor’s employees or authorizing the contractor to make the payments and reimbursing the expense.

· Treating the contractor’s employees as “members of the family” with privileges the same as, or similar to, those of its own employees – access to the on-site fitness center, for example.

“The basic defense against a claim of a joint employer relationship,” Mac Dermott advises, “is a strong, clear statement in the operating contract that the contractor is the sole employer and has sole authority over all aspects of its employment relationships.”

“But if management interferes, even indirectly, in the actions of its on-site contractor related to the contractor’s employees and their wages, working conditions and the like,” he adds, “then the barrier created in the contract crumbles.”         


About Clarion Group

Clarion Group is an consulting firm that advises companies, professional firms, colleges and universities, independent schools and institutions in the management, operation and improvement of  their in-house employee or student food services, catering, conference, lodging and related hospitality services throughout the U.S. and Canada.


For information, contact:

Tom Mac Dermott, FCSI, President

Clarion Group

PO Box 158, Kingston, NH 03848-0158

603/642-8011 or


Talk to us about your vision for your food service operation — Contact Clarion Group

Food Service Consultants
P.O. Box 158,
Kingston, NH 03848-0158

Phone: (603) 642-8011   
Fax: (603) 642-7744

Offering food service management consulting, hospitality services consulting, sustainable dining facility design. Nationwide food service consultants.

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