A McDonald's restaurant's drive-thru sign is pictured in Los Angeles, Calif.
The general counsel for the National Labor Relations Board (NLRB) has determined that the McDonald’s corporation may be considered a “joint employer” with its franchisees, in what could be a major blow to the fast food behemoth and the franchising business model in general. If upheld, the decision would mean that corporations such as McDonald’s share legal responsibility for the working conditions at their franchise locations.
McDonald’s spokesperson Heidi Barker said the company would challenge the general counsel’s determination before an administrative law judge.
In the meantime, the general counsel has directed NLRB regional offices to regard McDonald’s Corporation as one of the employers for workers at its franchised locations. That means that if a regional office finds merit in an Unfair Labor Practice (ULP) charge against one of the franchisees, the corporate headquarters itself will also be on the hook. Barker said that roughly 70 ongoing ULP cases against McDonald’s locations could be affected. Attorney Micah Wissinger, who represents McDonald’s workers in some of the cases against the company, put the number closer to over 100.
“McDonald’s can no longer get away with reaping all the profits and the benefits while saddling their franchises with all the risks and the blame for low wages,” he said.
“At some point, McDonald’s and the industry as a whole will decide that it makes sense to sit down at the table with these workers, because the workers will have changed the power dynamic,” he said.
The news out of the NLRB has made trade groups from fast food, retail, and other industries absolutely livid. A statement from the International Franchise Association (IFA) warned of the “devastating” consequences if franchisees and franchisors were considered joint employers.
National Retail Federation senior vice president David French also voiced his opposition to the NLRB decision. “It is just further evidence that the NLRB has lost all credibility as a government agency established to protect workers and is now just a government agency that serves as an adjunct for organized labor, which has fought for this decision for a number of years as a means to more easily unionize entire companies and industries,” he said.
“All it means is that corporations that exercise sufficient control over its franchised operations cannot feign ignorance or disclaim responsibility for the illegal acts which occur in its franchised stores,” she said.
Wissinger, and now the NLRB’s general counsel, argue that McDonald’s exercises significant control over employees in franchised restaurants, and therefore must be considered a joint employer. A series of recent wage theft lawsuits against the company make the same claim, bolstered by a detailed description of how McDonald’s Corporation supervises its franchisees’ business practices.
Chris Hayes talks with a minimum worker and a small business owner about the real world effects of minimum wage.