Agency says McDonald’s, not just franchisees, is liable for worker treatment

07/29/2014 5:37 PM

07/29/2014 5:37 PM

McDonald’s is “jointly responsible” for workers at its franchisees’ restaurants, the general counsel of the National Labor Relations Board ruled Tuesday, a decision that could expose McDonald’s to liability for the working conditions and practices in its franchisees’ stores.

The decision, if upheld, could make it easier to unionize fast-food worker nationwide. It also strikes at the stance taken by McDonald’s and some other fast-food chains that franchisees, rather than the chains, set wages. That position would be weakened considerably if McDonald’s and others are declared joint employers.

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.

In those cases, Griffin said, he would include McDonald’s as a joint employer, a classification that could hold the fast-food company responsible for actions taken at thousands of its restaurants. Roughly 90 percent of the chain’s U.S. restaurants are franchise operations.

“Now that the government has recognized what … workers have always known — that McDonald’s is the boss — maybe the company will stop making excuses for why we’re treated so poorly and pay us a wage we can live on,” said Richard Eiker, who has worked for a Kansas City McDonald’s franchisee for 18 years.

The next stages for the cases could involve Griffin’s attempt to seek a settlement. But the cases are more likely to be argued before an administrative law judge. Regional NLRB offices around the country were informed that McDonald’s should be treated as an employer in cases that come before them.

In a statement, Angelo Amador, vice president of labor and workforce policy for the National Restaurant Association, called the ruling another example of the Obama administration’s anti-small-business agenda. The ruling, he said, “overturns 30 years of established law regarding the franchise model in the United States, erodes the proven franchisor/franchisee relationship and jeopardizes the success of 90 percent of America’s restaurants who are independent operators or franchisees.”

If upheld, the general counsel’s move would give the fast-food workers and the main labor group backing them, the Service Employees International Union, more leverage in their effort to unionize McDonald’s restaurants and to increase hourly wages. The average fast-food wage is about $8.90 an hour.

Griffin said in a letter that of the 181 cases filed against McDonald’s and its franchisees since November 2012 — the month the first one-day strike was conducted against McDonald’s and other fast-food restaurants — he dismissed 74. Of the 107 other cases, he said he was still investigating 64, while his office found 43 had merit.

David French, senior vice president with the National Retail Federation, called the decision “outrageous.”

“It is just further evidence that the NLRB has lost all credibility as a government agency established to protect workers and is now just a government agency that serves as an adjunct for organized labor, which has fought for this decision for a number of years as a means to more easily unionize entire companies and industries,” French said.

The fast-food workers movement has argued that McDonald’s should be considered a joint employer because it owns many of the franchisees’ restaurant buildings and requires franchises to follow strict rules on food, cleanliness and hiring. McDonald’s has even warned some franchisees that they were paying their workers too much.

The cases were brought on behalf of workers who asserted, among other things, that they were wrongfully fired, threatened or suspended because of their campaign for a $15-an-hour wage and to unionize McDonald’s.

“McDonald’s can try to hide behind its franchisees, but today’s determination by the NLRB shows there’s no two ways about it: The Golden Arches is an employer, plain and simple,” said Micah Wissinger, a lawyer in New York who filed some of the cases against McDonald’s. “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.”

Catherine Fisk, a professor at the University of California-Irvine School of Law, agreed.

“A fast-food company 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,” Fisk said.

The Star’s Diane Stafford contributed to this report.

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