A ruling against McDonald’s handed down by the general counsel of the National Labor Relations Board may have far reaching implications in a number of industries. The ruling held that McDonald’s could be held jointly liable for labor and wage violations committed by its franchise operators. Some legal experts described the move as far-reaching while some business groups expressed outrage at the decision.
This ruling could dramatically disrupt a number of the practices that the fast-food industry and many other industries have used for years to keep their expenses down. One of these practices is the use of subcontractors or temp agencies to avoid the liabilities of employing the employees through the company. Under the new ruling, businesses that use this employment tactics could be partly liable in cases of wage, overtime, or union-organizing violations.
The ruling could also ease the way for unionizing nationwide. In the past 20 months, the labor board’s legal team has investigated numerous fast-food worker’s complaints that McDonald’s and its franchisees were engaging in unfair labor practices. These complaints include wage theft and taking retributive action against workers for pro-labor activities. McDonald’s has been facing a wave of strikes and protests in cities across the United States over its business practices and its treatment of its employees.
As a “joint employer,” McDonald’s could be held responsible for the actions taken at its thousands of restaurants. The case claimed that McDonald’s was a joint employer because its franchise owners are required to strictly follow the company’s practices on food, cleanliness and employment practices. Furthermore, the McDonald’s often owns the restaurants used by the franchise owners.
McDonald’s has said that the decision will be contested. McDonald’s claims that it is not liable for the actions of the franchise owners because the company does not determine or help determine decisions on hiring, wages or other employment matters. It is estimated that nearly 90 percent of McDonald’s restaurants in the United States are considered to be franchise operations.
