NLRB Rules McDonald's Responsible for Everyone Under the Golden Arches

The National Labor Relations Board ruled that both McDonald’s and its franchisees are responsible for the treatment of workers.

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The National Labor Relations Board ruled Tuesday that both McDonald’s and its franchisees are responsible for the treatment of its workers. If the decision holds, it could set a precedent allowing the nearly 300,000 workers at franchises to unionize nationally.

As Steven Greenhouse reported:

Richard F. Griffin Jr., the labor board’s general counsel, said that of the 181 unfair labor practice complaints filed against McDonald’s and its franchisees over the last 20 months, he found that 43 had merit on such grounds as illegally firing or threatening workers for pro-union activities."

As Ned Resnikoff explained, the existing franchising structure is part of what kept the national brands insulated from the affairs of local franchises:

Under this system, local franchise owners carry the responsibility of paying workers, managing fast food restaurants on a day-to-day basis, and adhering to the rules handed down by whichever corporation owns the restaurant’s brand. And to top it all off, the franchisee pays the corporation royalties in exchange for the privilege of using its name and business model.

The ruling, however, may change all of that starting with McDonald's. In a statement obtained by The Wire, the Vice President of Labor and Workforce Policy Angelo Amador for the National Restaurant Associated offered this assessment:

The long-established joint-employer standard has helped create millions of restaurant jobs through the franchisor/franchisee model. NLRB’s attempts to overhaul the law will have dire consequences to franchisees, franchise employees, and the economy as a whole.

By making franchisors liable for their franchisees’ employment practices and redefining individually owned franchises as ‘big business,’ NLRB would disrupt the franchisor/franchisee relationship and impede entrepreneurship and restaurants’ ability to continue to create jobs, particularly in an increasingly challenging economic environment.  The net effect is counterproductive and will indeed create ‘big business.’

Heather Smedstad, senior vice president of human resources at McDonald’s USA, also contested the ruling, saying that the effect will be different:

This relationship does not establish a joint employer relationship under the law. This decision to allow unfair labor practice complaints to allege that McDonald’s is a joint employer with its franchisees is wrong. McDonald’s will contest this allegation in the appropriate forum.”

Meanwhile, advocates of fast-food workers are celebrating:

This article is from the archive of our partner The Wire.