This is the Cato Daily Podcast for Friday, August 8th, 2014.

I'm Caleb Brown.

When a franchisee abuses a worker, there may soon come a time when the franchise

or, a company like McDonald's will be held legally

liable. It would be a new turn in labor law with some problematic implications. Walter Olson,

a senior fellow at the Cato Institute, offers his analysis.

So the top prosecutor for the NLRB has rejected a claim by McDonald's with some big implications for a lot of companies, which is that

they are not effectively the boss of people who work for McDonald's franchises, which of course are distinct legal

entities.

So what does that mean?

Why do we care?

Until recently, it would have been taken as simply a subtle law that McDonald that franchises. Franchising law is set up so that as a small business that operates,

some restaurants, you sign a contract.

It has a lot of requirements having

to do with the quality of the experience, but you remain the employer,

you remain the business in charge of a lot of different decisions.

And the National Labor Relations Board is now attempting to change the subtle law quite drastically

with the proposition that in the McDonald's franchising situation and potentially in a lot of other

situations franchising non, the seemingly distant large brand or corporation is really a joint employer which is jointly liable for any

labor violations they may find on the scene at the local restaurant.

Okay so I'm thinking through the implications of this, there are a lot of institutions that hire, that

contract with cafeterias to, or companies that hire workers?

...