July 31, 2014
By Steven Wishnia
McDonald’s can’t evade unfair-labor-practice charges by claiming that the workers who complain are actually employed by its franchises, the National Labor Relations Board’s general counsel declared July 29.
The NLRB informed its more than 40 regional offices that they can consider McDonald’s and its franchisees to be “joint employers” when ruling on workers’ complaints. That definition is based on whether a corporation “shares or codetermines” working conditions at its franchises or contractors, explains Catherine Ruckelshaus of the National Employment Law Project.
The move could have far-reaching consequences for the nation’s biggest low-wage employers, including Walmart, Amazon, and fast-food companies. These corporations typically claim that they are not responsible for wages or conditions in their warehouses or restaurants, because the workers there are technically hired by contractors or franchisees.
“It’s a really important step to ensure that our laws are responsive to how business structures itself,” says Ruckelshaus. Businesses can outsource or franchise, she adds, but “they can’t franchise out their responsibility.”
The ruling came after NLRB lawyers investigated 181 complaints the board received after fast-food workers began a series of mini-strikes and demonstrations in November 2012, alleging that McDonald’s and its franchisees illegally fired or otherwise penalized workers for participating. Most came from New York City, with others from Los Angeles and Chicago, an NLRB spokesperson said. Those cities have been the centers of recent campaigns to organize fast-food workers, backed by the Service Employees International Union.
The general counsel’s office found 43 of those complaints valid, with the rest either dismissed or still being investigated. If McDonald’s, the franchisees, and the workers can’t settle those cases, the NLRB said, the company will be a “joint employer respondent” in further proceedings.
McDonald’s denies that it is a joint employer, and insists that its 3,000 franchisees are independent businesses. “McDonald’s does not direct or co-determine the hiring, termination, wages, hours, or any other essential terms and conditions of employment of our franchisees’ employees,” personnel executive Heather Smedstad said in a statement.
“The reality is that McDonald’s requires franchisees to adhere to such regimented rules and regulations that there’s no doubt who’s really in charge,” Micah Wissinger, a New York lawyer who brought the case on behalf of McDonald’s workers there, responded in a statement. The company, notes Ruckelshaus, requires workers to wear specific uniforms, tracks franchisees’ costs and outlays, and mandates that they use software that determines workers’ schedules based on sales patterns—if business is slow, they can be told not to clock in or sent home early.
The ruling is also important, Ruckelshaus says, because it shows that the NLRB is not just for union members—it also protects collective action by nonunion workers.
