Attorney Gregory S. Mager presented at the Collaborative Family Law Council of Wisconsin’s Second Saturday on October 11, 2014. The Council’s Second Saturday program is designed to inform the general public regarding collaborative divorce.
Mr. Mager is a member of the Collaborative Family Law Council of Wisconsin, and a shareholder with O’Neil Cannon
Effective January 1, 2014, a fundamental change was made to the method by which public construction projects are led by the State of Wisconsin’s Department of Administration. Wisconsin adopted a new single-prime delivery method to replace its former multiple-prime method. Under the former multiple-prime method, the State would contract with a principal contractor, but would also enter separate contracts directly with mechanical, electrical, plumbing, and fire protection (MEP) subcontractors. Under the new single-prime method, the State will only enter into a single contract with a general prime contractor.
Wisconsin’s new single-prime delivery method is actually a unique hybrid, because the State will continue to solicit competitive public bids from the MEP subcontractors, as was done under prior law. However, the successful MEP bidders will enter subcontracts with the general prime contractor, rather than with the State.
Under the new law, all contractors must first be certified by the Division of Facilities Development before submitting any bid. The bidding process begins with the submission of competitive public bids by the MEP subcontractors. The successful low MEP bidders are then selected and identified by the Department of Administration, and the Division of Facilities Development must post the bidders’ names and the amounts of the successful MEP bids on its website. Within five (5) days thereafter competitive public bids for the general prime contract must be submitted. The bidders must include the bids of the successful MEP contractors in their own bids for the general prime contract. The general prime contract is then awarded to the lowest qualified responsible bidder.
The general prime contractor is required by law to enter into subcontracts with each of the successful MEP subcontract bidders selected by the Department. The law mandates that each subcontract must contain certain terms prescribed by statute, including provisions pertaining to prompt payment, insurance and bonding, indemnification, and retainage. The law generally precludes alteration of the scope or price of the subcontract work. It is up to the general prime contractor and each of the MEP subcontractors to negotiate all other subcontract terms. Reaching agreement on the many remaining critical subcontract terms could prove problematic, however, given the arranged marriage between the general prime contractor and each MEP subcontractor that results from Wisconsin’s hybrid single-prime delivery method. The general prime contractor will probably find it difficult or impossible to dictate terms unfavorable to the MEP subcontractors, because it has no voice in the selection of the MEP subcontractors and the law does not require the MEP subcontractors to accept any terms besides those imposed by statute.
Wisconsin’s new hybrid single-prime system affords protection to MEP subcontractors against bid shopping, and continues the relative autonomy they enjoyed under the old multiple prime system. Those benefits come at a price, however. The new law requires each MEP subcontractor to obtain a 100% performance bond and a separate 100% payment bond naming the general prime contractor as the obligee.
Of perhaps greatest concern to MEP subcontractors are the new law’s indemnification provisions. The new law mandates the inclusion into all MEP subcontracts of certain extensive and complex indemnification terms, which generally obligate the MEP subcontractor to “defend, indemnify, and hold harmless” the general prime contractor and its principals for damages and fines for “bodily injury, sickness, disease, or death, or injury to or destruction of property, including… loss of use” arising from the performance of the subcontract work. This includes an obligation to indemnify the general prime contractor for claims arising from its own negligence or fault in providing supervision or oversight of the MEP subcontractor’s work. MEP subcontractors may find that these indemnification obligations expose them to potential liability for which they may have no insurance coverage under their general liability policies.
By creating its own unique hybrid delivery method, Wisconsin has ventured into uncharted territory. Time will tell whether this experiment meets with success or failure. The new law raises many unanswered questions. Prospective bidders need to know that the rules have changed, how they have changed, and the significant implications of those changes.
Attorney Gregory S. Mager presented “Civil Procedure, Evidence, and Pretrial Discovery” and “Temporary Hearings—A Panel Discussion” in August, 2014 at the State Bar of Wisconsin’s 33rd Annual Family Law Workshop in Sturgeon Bay, Wisconsin.
Mr. Mager is the Director of the Family Law Section of the State Bar of Wisconsin, and a shareholder with O’Neil Cannon
Understanding the rules of IRA distributions is like taking a trip through our childhood. Remember Goldilocks and the three bears? Too hot, too cold, just right? IRA distributions work a sort of the same way.
Cannot Be Too Early
IRAs were created by Congress to be retirement savings vehicles. Because of that intent, Congress (through the tax code) penalizes distributions from IRAs that are “too early.” Too early is generally when the account owner is younger than 59½. The consequence of taking distributions too early is that when the account owner receives the distributions from the IRA, not only will the distributions be taxed at ordinary income rates, an additional 10% penalty will apply. There are some exceptions to the 10% penalty; most of which the account owner cannot plan for (death, disability) and others which are really not all that helpful (substantially equal payments over the owner’s life expectancy).
Cannot Be Too Late
The power of the IRA is tax-deferred growth. The so-called Rule of 72 is supercharged when earnings can grow without the drag of income taxes. But always remember, when it comes to tax advantages, the government tends to see the taxes we save as its lost revenue. And it only delays receiving “its revenue” for so long. With IRAs, that time of reckoning comes on April 15 of the year after the year when the account holder reaches 70½. Thereafter, each year, the account holder must take what are known as required minimum distributions.
Cannot be Too Little
At 70½, account owners need to take required minimum distributions; any distributions that are less than that are penalized. Required minimum distributions are calculated based upon the life expectancy of the account owner. That life expectancy gets recalculated every year. The essence of recalculation is that even though the percentage of the account balance that must be distributed each year increases (due to the lessening of the account owner’s life expectancy), it will never require the distribution of the entire account balance during the account holder’s lifetime.
Cannot Go On Forever
While recalculation of life expectancy of the account owner means the IRA will never be depleted by required minimum distributions during the account owner’s lifetime, the same cannot be said for periods after the death of that person. If the IRA is left to the surviving spouse, the spouse also gets the benefit of annual recalculation. However, if the IRA is left to someone other than the surviving spouse, the best that beneficiary can hope for is the use of his or her life expectancy at the time of inheritance for the calculation of IRA distributions. That life expectancy will not be recalculated. So, for example, if an IRA is left to a child with a 30 year life expectancy, that child must receive 1/30th of the IRA the first year, 1/29th the second year and so on until the balance is distributed in the 30th year following inheritance. It is in that 30th year that the IRA will no longer be allowed to exist as a tax-free accumulation vehicle. (For more information on so-called stretch planning strategies for inherited IRAs, please see other articles on the website dedicated exclusively to this topic).
So when it comes to retirement, IRAs can be powerful planning tools. But like Goldilocks, there are a lot of restrictions in getting your clients’ plans “just right.”
Under a federal statute known as the False Claims Act, whistleblowers with knowledge of overcharges or other fraudulent activity directed at the federal government may be entitled to substantial monetary rewards through lawsuits known as qui tam cases. The monetary rewards authorized by the False Claims Act provide those who have valuable information about government fraud a strong incentive to come forward and report it. Companies alleged to have engaged in such fraud often fight back by arguing that a whistleblower’s qui tam case should be dismissed because it is improperly based on “publicly available” information, citing the False Claims Act’s “public disclosure bar.”
In a victory for whistleblowers and taxpayers, a federal appellate court based in Chicago recently rejected a broad reading of the public disclosure bar. In U.S. ex rel. Heath v. Wisconsin Bell, Inc., the Seventh Circuit Court of Appeals ruled that the public disclosure bar did not apply where a whistleblower’s qui tam claim cited a contract that was available for public review on a government website. The Court of Appeals decided that the whistleblower’s claim against Wisconsin Bell could proceed because it was not “based upon” the publicly available contract, but instead was based on “genuinely new and material information” that the whistleblower obtained through “his own investigation and initiative.”
The whistleblower who filed the case, Todd Heath, is a telecommunications consultant based in Waupun, Wisconsin. Heath is retained by school districts and private businesses to identify overcharges contained in their telephone bills. Those bills and supporting materials are often complex and can be confusing even to sophisticated consumers. Heath, who has been auditing phone bills for more than 20 years, has the training and experience necessary to interpret such materials. Relying on information obtained through his own investigation and professional experience, Health filed a qui tam case alleging that Wisconsin school districts were overcharged for telecommunications services.
The Wisconsin school districts were not the only victims of the alleged overcharging, according to Heath, because the federal government subsidizes and pays a substantial portion of the schools’ telecommunications bills under a federal program known as the E-Rate program. Before he filed his qui tam case, Heath notified the federal government of his findings, as required by the False Claims Act.
The public disclosure bar relied upon by Wisconsin Bell as a defense is intended to prevent whistleblowers from filing “parasitic” or “opportunistic” qui tam lawsuits based on information obtained through government reports or other public documents of the type specifically listed in the federal law. The Court of Appeals concluded that the public disclosure bar did not apply to Heath’s lawsuit, however, explaining that his case was not “based upon” the contract that Wisconsin Bell cited to support its defense. After ruling in Heath’s favor on this issue, the Court of Appeals decided not to consider other arguments made by Heath concerning the public disclosure bar.
Heath is represented in this case by Doug Dehler of O’Neil, Cannon, Hollman, DeJong and Laing, S.C. in Milwaukee, Wisconsin. It is expected that, within several weeks, the Seventh Circuit Court of Appeals will send the case back to a federal court in Wisconsin for additional proceedings.
If you have questions regarding this case or any other potential whistleblower case under the False Claims Act, please contact Attorney Doug Dehler at 414-291-4719 or doug.dehler@wilaw.com.
The revocable trust is the document that is almost always the centerpiece of the estate plan. Simply put, the revocable trust is almost always the document that controls who gets what. That might be counterintuitive to some people who assume the Will is the “dispositive document.” But, most often, the Will serves only two purposes: (1) It is where clients nominate the person or persons who will raise their minor children, and (2) it is the clean-up document which transfers any property that has inadvertently not been otherwise transferred as part of the estate plan. In other words, other than the critical, crucial role of naming the so-called guardian of minor children, if the planning has been done correctly, the Will is irrelevant.
Let’s take a step back—how can that be? Isn’t the Will THE document that states who gets property when someone dies? First, if the property transfers by either title or contract, it is that title or contract (not the Will or trust) that determines who gets that property. For example, if Mr. and Mrs. Smith own their house as joint tenants with the right of survivorship, and Mr. Smith’s Will provides that his interest in the house goes to his son upon his death, then if Mr. Smith dies first, Mrs. Smith will own the entire house. Given the titling of the property, the survivor—in this case Mrs. Smith—is the sole owner upon the death of the joint tenant (Mr. Smith). So even though Mr. Smith’s Will attempts to transfer one-half interest in the house to his son, the title trumps that intent—making the Will, as to the house, irrelevant.
Second, if property is transferred by contract, it is the contract rather than the Will (or trust for that matter) that controls who gets that property. For example, let’s say Mr. Smith owns a stock brokerage account. Mr. Smith completes a beneficiary form leaving the stock account to his son. Later, Mr. Smith remarries and thereafter has a falling out with his son and disinherits him under his Will. When Mr. Smith dies, who gets the stock in the brokerage account? The answer is, his son—the property passes by contract, so the contract, not the Will, controls. The contract says that the account goes to Mr. Smith’s son at his death. Again, as to that account, the Will is irrelevant.
Finally, it is inevitable that the client will own some property that does not pass by either title or contract. So that property will pass by Will, correct? The answer to that question is yes; if our client, Mr. Smith, dies owning property—property that does not pass by title or contract—it will pass by his Will. But the goal of our estate plan is to have Mr. Smith die owning no property—at least no property that does not pass by contract or title. But why?
If Mr. Smith dies owning property that does not pass by title or Will, that property generally must go through the process of probate before it gets to its intended recipient. So what is probate? Essentially it is a public process wherein what you own and who you owe is filed with the court and becomes part of the public record. For some people, the lack of privacy in that process is troublesome. For others, that is not an issue, but the cost and delay of the probate process is problematic. Generally, all things considered, most clients decide that probate is to be avoided rather than embraced. But the only way to avoid probate is to die owning nothing, nothing other than assets that pass by title or contract. Is that practical? It is if you transfer all of those assets to a revocable trust.
A revocable trust is a trust controlled by the client. So if Mr. Smith creates a revocable trust, he will be able to access that trust property any time he wants, for any needs or desires he has. He will be able to change the trust and terminate the trust any time he chooses. From a practical perspective, a revocable trust is identical to outright ownership. But the advantage is that, legally, it is not ownership and any asset in the trust does not have to go through probate. If all of Mr. Smith’s assets—those that do not pass by title or contract—are in his revocable trust—he avoids probate. And again, all things being equal, that is a good thing. Finally, the trust would provide who gets the property upon Mr. Smith’s death—it can be worded identically to how he would draft his Will. For example, the trust could provide that, at his death, the trust property is distributed equally to Mr. Smith’s children.
So that is the revocable trust in a nutshell; the centerpiece of the estate plan.
O’Neil, Cannon, Hollman, DeJong and Laing S.C. is pleased to announce that 14 lawyers have been named to the 2015 Edition of Best Lawyers®, the oldest and most respected peer-review publication in the legal profession.
Best Lawyers® has published their list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 65 countries. Lawyers on the Best Lawyers in America® list are divided by geographic region and practice areas. They are reviewed by their peers on the basis of professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.
O’Neil, Cannon, Hollman, DeJong and Laing S.C. would like to congratulate the following attorneys named to the 2015 Best Lawyers in America® list:
Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers® is based on an exhaustive peer-review survey. Over 52,000 leading attorneys cast more than 5.5 million votes on the legal abilities of other lawyers in their practice areas. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers® is considered a singular honor. Corporate Counsel magazine has called Best Lawyers® “the most respected referral list of attorneys in practice.”
As an estate planning attorney, the most common question I get—both from potential clients and at cocktail parties (or kids’ soccer games)—is, “do I need a Will?” Now, I know that a lot of estate planners have a simple, consistent three letter answer for that is, “YES”. But that is not my answer. My answer, maybe a typically frustrating lawyer answer is, “it depends.”
So let’s say a potential estate planning client, John, has asked me that exact question— do I need a Will? The first question I will lob back to my new inquisitive friend, is does he have minor children? If the answer is yes, my questions are complete and my answer is “yes, you need a Will.” Why, might you or John ask? Well, what is more important to a parent than who will raise his kids if he (and his wife) cannot? The answer is nothing. Who makes that decision? In other words, if John and his wife get into a fatal car accident on the way home from dinner that night, who will decide who gets to raise his kids? The answer is, under all circumstances, a judge…A probate court judge. The next question is how will the judge make that decision? Well, from experience, I will tell you what the judge hopes will be in place to aid in making that decision: a nomination of a guardian in John’s Will. The Will is the only document in which John can nominate a guardian for his children; if there is no Will, regardless of whether John has written down his hopes on another document, the judge will be on his or her own in making the decision. Therefore, if the answer to the question, “do you have minor children?” is “yes,” then the answer to whether “you need a Will” is also “yes.”
But what if the answer is no—what if John and his wife do not have minor children—does he need a Will? The second question is, in general, who do you want your property to go to? You see, even if John does not have a Will, he does have an estate disposition plan that dictates where all of his property will go when he dies. It is just not a plan he has created. Instead, it is a plan created by the state in which he resides under that state’s “intestacy” law . While each state’s law is different, generally, the intestacy laws provide that, first, everything goes to the surviving spouse; if no spouse, then equally to the kids, then if no kids, to the grandkids, if no grandkids, to parents, then siblings, then nieces, and nephews, then cousins. So, if John wants everything to go to his wife when he dies, does he need a Will? Maybe not. But what if he and his wife die together, in a common accident? Given they have no chidren, everything he owns goes to his parents. And if his wife outlives him, everything they own goes to her parents. Is that what he wants? Is he okay with that? If so, he does not need a Will. But if he is not, then, yes, he does need a Will.
Finally, even if the intestacy statutes work in general, I need to make sure they work specifically. For example, let’s say John was not married but rather a 70-year-old widower with three adult children. Who does John want the property to go to? Equally to his three kids. If he had no Will, where would his property go? Equally to his three kids. Seems like he does not need a Will. But what if he wants specific property to go to specific people? Maybe John has some real estate investments, and he has a child that has strong acumen and passion in real estate development. And, he also has a stock portfolio with a child who is talented in managing and trading equities. Remember an estate plan gets the right property to the right people. Intestacy laws give the kids 1/3 of each asset—only a Will gets the right property to the right people. So if that is the case, and John wants to get specific property to specific people, he needs a Will.
So your client asks, do I need a Will? Don’t be a sheep and simply say “yes.” Be an advisor and ask:
1. Do you have minor children?
2. Who do you want your property to go to?
3. Do you want specific property to go to specific people?
The answers to these questions will drive the answer to your client’s question.
For those of you who spend time in the estate planning arena, in helping your clients get the right property to the right people at the right time, you inevitably run into “the conflict”: The conflict between the mathematical truth that it is better, tax-wise, under virtually all circumstances, to have your clients give away property as soon as possible: and the reality that people are (and should be) reluctant to cede control over their wealth, which they generally worked very hard to build. The problem with this conflict is that we as planners tend to fall too quickly and easily into what business consultants call “the tyranny of the or.” We concede that the math and the control are mutually exclusive. But, luckily, that is simply not true.
Let’s assume that our clients are a successful couple in their early 50s. Their net worth is $8 million. If they die without any growth in their combined estate, they owe no estate taxes given the $5 million (indexed) exemption. But if they do not both die soon, their assets could increase in value to more than $10 million (indexed), the amount that they could exclude from estate taxation, under current law, working together. In fact, if we assume that their assets will grow at a 6% rate and that the survivor will live into his or her mid-80s, the million should double in value 3 times – to 14 million, then 28 million then 56 million.
Even with modest appreciation, then our clients will have a large estate tax bill. And if the $7 million is in assets that would be hard to sell quickly (such as real estate), or that we do not want to have to sell (such as a family business), the estate tax problem could get to be difficult and expensive to solve.
But right now, we have a great solution. We can have Mom and Dad make a gift right now, in an amount equal to the current gift tax exemption, while keeping enough to live comfortably. In other words, they can give away “the extra” (the property that is more than what they believe they will need to live comfortably); or, stated another way, those investment assets that they will never need to touch, based upon reasonable projections.
The problem is again, at least in my world, not a lot of this kind of planning is getting done. SO the question is, why not? While the answers to that question are probably as varied and as numerous as the people who answer it, the answers tend to boil down to these two themes:
1) We recently experienced, as a country, one of the worst economic stretches in our history. From late 2008 through early 2009, what felt like “enough” became “not enough” almost overnight. Having just experienced that national economic nightmare, people are less willing to part with what seems to be “the extra.”
2) Even if our clients had not just survived the Great Recession, andeven if they did have some level of confidence, people in their mid-50s, with at least 30 years of life expectancy in front of them, are reluctant (to say the least) to relinquish control over a portfolio they’ve worked a lifetime to build.
So are we back to the beginning? Do we have that common planning tug of war: The raw, compelling math that screams, “should clients give it away?” versus pulling against the raw human fears of losing control and becoming a pauper?
The difference is that we have an intelligent solution that guides our clients away from the tyranny of the or. Let’s go back to our $8 million example and let’s assume Mom and Dad believe that, based upon their lifestyle and growth assumptions, they will conservatively need $2 million to live comfortably. Therefore, using our terminology, $6 million is the extra. So let’s take that $6 million and title it in such a way, that under state law, half of that property is owned exclusively by Mom and half is owned exclusively by Dad. Dad, then, using his gift tax exemption, will give his property to a trust. Under that trust, Mom will have the right to control, enjoy, and transfer the property. And then Mom will do the same thing: transfer her property to a trust designed for Dad’s benefit.
If we do this, the $6 million is out of Mom and Dad’s estate. When they die, presuming that they consume the income and growth on the $2 million they keep, they will owe nothing in estate taxes. The trusts, who own the $6 million, and the appreciation on that property, are designed to avoid estate inclusion; in fact, they can be designed as dynasty trusts to avoid estate inclusion forever.
In discussing this idea with thoughtful and curious clients, inevitably those clients will raise a couple of issues or concerns, such as:
On that point, the first thing to remember is that the property in the trusts is “extra,” property Mom and Dad really had no intention of tapping into. Stated another way, Mom and Dad believed that $2 million was a sufficient amount for the two of them to live out their lives comfortably. Now, if we do nothing, Mom has more than twice that amount ($5 million) to rely on. She should be just fine. But, if Mom and Dad are concerned, they should remember that the property in the trusts are extra, and therefore, chances are they will not be tapping into that property in a way that will stunt its economic growth. So if the property grows at 6, and Dad lives another twelve years the chances of which are very good), then Mom will once again have control over $8 million; $2 million outside of the trust and $6 million in the trust she controls. And, to hedge against asset underperformance and/or Dad’s early demise, Mom can use the property in the trust Dad created for her to purchase a life insurance policy on Dad’s life which could literally ensure that she will always have access to $8 million of property.
Finally, in implementing this good idea, it is critical to work with competent legal counsel who has wisdom and experience in trust design and the reciprocal trust doctrine. The trusts created by Mom and Dad can be (in fact, will be) similar. But they cannot be identical and wise counsel will know where the key differences in the trusts need to be.
In a decision that could have far reaching implications for industries that rely on the franchisor/franchisee business model, the NLRB’s General Counsel, Richard Griffin, Jr., determined that 43 unfair labor practices charges against McDonald’s, USA, LLC may move forward under a “joint employer” theory finding that McDonald’s should be held liable along with its independently owned franchisees based upon allegations that the franchisees violated worker’s rights in responding to workplace protests. The NLRB General Counsel’s decision to move forward against McDonald’s not only attempts to extend liability under the National Labor Relations Act to franchisors for acts of its franchisees, but it may also open the door for unions to more easily organize multiple independently owned franchise locations operating under agreement with a single franchisor.
The “joint employer” theory is a legal concept that treats two allegedly separate employers as one. The “joint employer” theory does not depend upon the existence of a single integrated enterprise, but, rather, assumes in the first instance that companies are “what they appear to be” – independent legal entities that have merely chosen to handle jointly… important aspects of their employer-employee relationship. Typically, a joint employer relationship is found between two companies where the non-employing company actively and significantly exerts control over the same employees on those matters governing the essential terms and conditions of employment such as hiring, firing, discipline, supervisions, and direction.
The NLRB General Counsel’s decision to target McDonald’s as a joint employer comes in unison with big labor’s recent efforts to protest wage and benefits levels for fast food workers. These recent protests over wages and benefits is big labor’s attempt to attack the franchisor/franchisee business model by deeming independently owned stores to have the deep pockets of its franchisors – ignoring the economic realities of the franchisor/franchisee business model. For example, the SEIU has staged protests at different fast food establishments across the country demanding wages as high as $15/hour for all fast food workers based upon the fallacy that that such wages are appropriate given the corporate franchisor’s finances. Wage demands of this type ignores the economics of operating an independent and locally-owned franchise where wages and benefits are often set based upon local market conditions as well as a franchisee’s own profit and loss rather than upon the finances of its franchisor.
The NLRB General Counsel’s decision to move forward with complaints that attempts to now treat McDonald’s as a joint employer with its franchisees provides ammunition to big labor to further its war over wages and benefits against fast food franchisees by blurring the line between a small independently and locally-operated franchisee and its affiliated large corporate franchisor. In addition, with the NLRB willing to make clear that a corporate franchisor can now be held liable for unfair labor practices as a joint employer with its franchisees, it is only logical that the NLRB’s next step will be to permit unions to organize fast food establishments based upon petitioned collective bargaining units that consist of multiple franchisee locations of a single franchisor even though the locations are independently owned and operated by different independent owners.
The NLRB General Counsel’s decision to treat McDonald’s as a joint employer does not currently have the effect of law. Once the NLRB issues the complaints, these cases will have to proceed through the adjudicative process leading up to a hearing before an administrative law judge before the cases might reach the full National Labor Relations Board for a decision.
Given the political make-up of current NLRB members, political ideologies will definitely pave the way for the NLRB’s General Counsel’s viewpoint on joint employer liability to prevail against McDonald’s before the NLRB despite three decades of legal precedent that would hold otherwise. Needless to say, the battle will not end at the NLRB, as it would be expected that this issue will most likely wind-up before the U.S. Supreme Court who will make the ultimate decision on this important issue.
At this point, the NLRB will try to achieve settlement with McDonald’s before proceeding to hearing with these cases. It would be expected that McDonald’s will oppose any attempts to settle these cases and try to move these cases beyond the NLRB and into the courts where strong legal precedent has mostly rejected the joint employer theory for businesses set up under the franchisor/franchisee business model. It is in the federal court system where McDonald’s has the best opportunity to defeat the NLRB’s new approach against the fast food and other industries that rely on the franchisor/franchisee business model.
We will keep you informed of these cases before the NLRB as they develop.