Economy

Government Labor Board Brings Hammer Down On McDonald’s

CREDIT: AP Photo/Seth Perlman

On Friday afternoon, the National Labor Relations Board (NLRB) filed a formal charge against McDonald’s, alleging that it has violated workers’ rights in a variety of ways, including by threatening retribution against employees who participate in strikes.

The complaint targets both individual McDonald’s franchises and the multi-billion-dollar corporate parent company itself, thus lending official weight to a previous finding that franchise agreements do not let McDonald’s USA, LLC off the hook for misbehavior by franchisees. The NLRB has found that 86 out 291 separate worker charges against McDonald’s filed in the past two years have legal merit. Friday’s charges target McDonald’s stores in 13 different cities from New Orleans to Detroit and from Manhattan to Los Angeles.

Lobbyists and store owners from the International Franchise Association have been urging Congress to pre-empt the NLRB actions in recent months. The trade group flew in hundreds of its members for a lobbying day in September, arguing that the NLRB’s finding that McDonald’s is responsible for franchisee behavior “would essentially take away their autonomy to run their own business.” Actual autonomy is hard to come by, though, since store owners are bound by a laundry list of stringent rules set by the corporate parent. The agency’s decision to charge McDonald’s and its franchisees jointly was based in large part on those rules and on a company-provided computer system that monitors labor costs and allegedly facilitates wage theft. It offers support for a separate series of private lawsuits brought on behalf of workers that also seek to challenge the corporate indemnity that franchise agreements have traditionally offered.

The ultimate fate of the franchise business model remains uncertain, but Friday’s formal government charges are a significant advance in the campaign to force fast food companies to reckon with their underpaid workers’ demands. “The federal government’s complaint makes clear that fast-food companies like McDonald’s can’t have it both ways — it can’t exercise such pervasive control over a workplace and effectively dictate wages and working conditions while still saying that it’s not the employer,” Catherine Fisk, a labor and employment law expert at the UC Irvine School of Law, said in a press release.