A high-stakes legal dispute pitting McDonald’s Corp. against labor unions is set to enter a crucial phase this week, when the National Labor Relations Board takes up consideration of a case with major implications for franchise businesses.
An NLRB administrative law judge on Monday will begin weighing whether McDonald’s should be responsible for what employees say are poor working conditions and low pay at many of its franchise restaurants.
A finding in the affirmative would mark the first time that a major franchisor would be found culpable for labor violations at individual chains, following a finding last year by the NLRB’s lead attorney that McDonald’s should be treated as a “joint employer.”
That status would expose the corporation to liability for worker rights violations and force it to the negotiating table in collective bargaining situations.
The joint employer finding is among the most contentious actions taken by a labor board that has emerged as a political lightening rod under the Obama administration, and a top punching bag for business groups and congressional Republicans.
McDonald’s argues it is not a joint employer, contending that independent franchise owners operate the restaurants. Any ruling to the contrary would do grave harm to the franchise model, business groups say.
“It’s not going to stop at McDonald’s,” explained Elizabeth Milito, senior legal counsel of the National Federation of Independent Business (NFIB). “This is really an assault on the entire franchise business model."
McDonald’s accuses the labor board of “mirroring the union’s position” and placing a target on the company's back.
“As we have said previously, the National Labor Relations Board’s decision to involve McDonald’s in its actions against our independent franchisees improperly strikes at the heart of the franchise system — a system that creates economic opportunity, jobs and income for thousands of business owners and their employees across the country,” the company said in a statement.
But critics allege McDonald’s is, in fact, controlling the operations from a distance by instructing franchise owners on everything from their employees schedules to what they should say to customers and how they fold sandwich bags — claims the cheeseburger chain adamantly disputes.
“McDonald’s is the boss,” said David Dean, an employment lawyer with James & Hoffman PC. “It shouldn’t be hiding behind its franchisees.”
The consolidated case now before the NLRB stems from dozens of complaints of alleged retaliatory actions taken by McDonald’s franchises against employees who participated in nationwide fast food protests.
In November 2012, about 200 workers protested against McDonald’s and other popular fast food restaurants in New York City. From there, the fast food protests took off and spread to more than 200 cities across the country.
The fast food workers are calling for no less than $15 an hour and the opportunity to organize a union.
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