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NLRB Charges McDonald’s as Joint Employer with Franchisees

Franchisor McDonald's held jointly liable for alleged labor violations by franchisees
McDonald's oversees a national hiring day for workers in corporate & franchised restaurants. photo/bmm

The National Labor Relations Board filed 13 cases against McDonald's Corp. (NYSE:MCD) and its franchisees this month, alleging they violated the rights of employees, who worked at McDonald's restaurants at various locations across the country.

The government agency's complaints state that McDonald's and its restaurant owners made statements and took actions against fast food workers for engaging in activities that aimed to improve their wages and working conditions. They accuse the parties of interfering with nationwide protests organized by unions over the past two years over their terms and conditions of employment.

The Office of the General Counsel informed McDonald's and its franchise owners that, of the 291 charges filed since November 2012, 86 cases have been found meritorious. While representatives of that office have been engaged in efforts to settle the matter, little progress has been made, according to the NLRB. Of the 291 charges filed, 11 cases were resolved, with 71 remaining.

The 13 complaints involving 78 charges against both franchisor and franchisees were filed by the following regional offices:

  • Region 2     Manhattan
  • Region 4     Philadelphia
  • Region 7     Detroit
  • Region 10-     Atlanta
  • Region 13-     Chicago
  • Region 14     St. Louis
  • Subregion 17     Kansas City
  • Region 15 –     New Orleans
  • Region 18 -     Minneapolis
  • Region 20 –     San Francisco
  • Region 25 -    Indianapolis
  • Region 28 -     Phoenix
  • Region 31 –     Los Angeles

The alleged unlawful conduct by McDonald's and its franchisees include discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity. That includes threats, surveillance, interrogations, promises of benefits, and overbroad restrictions on communicating with union representatives or with other employees about unions and the employees' terms and conditions of employment.

While the NLRB has scheduled consolidated hearings in three regional locations in the Northeast, Midwest and West to address the issues, it states that absent settlement, the initial litigation will commence on March 30, 2015. The hearings will begin in Manhattan and Philadelphia, and move to Chicago, Indianapolis, Los Angeles, San Francisco. The others will be scheduled after the initial litigation before an administrative law judge, if not resolved in settlement.

Response from community

David Scher, principal of The Employment Law Group, said in interview with The Legal Broadcast Network, the NLRB decision is a win for unions in that it will make McDonald's liable for labor violations by franchise owners. The employment attorney said that this will likely be an interesting and long legal battle. He points out that the right to protest is protected by the First Amendment, and freedom of speech and the right to organize are cherished and protected rights in America. "It is illegal to fire or discriminate against employees for protesting as long as they do so peacefully and without any physical harm to people," Scher said in his interview.

The Legal Broadcast Network also interviewed Lisa McComb, spokesperson for Mc Donald's. She said they will fight the claims adding, "These allegations are driven in large part by a two-year, union-financed campaign that has targeted the McDonald's brand and impacted McDonald's restaurants."

The December 19 filing of complaints was the first step in a long process, and it could have the potential to rewrite long-held rules governing labor relations between parent companies and franchisees who run independent businesses, a Reuters report stated.

It said Richard Griffin, NLRB's general counsel had expressed that the complaints strike new ground in treating McDonald's, the world's largest restaurant chain, as a "joint employer." The attorney said that meant the franchisor could be held liable along with its franchisees for any violations.

Reuters further reported that Mary Joyce Carlson, counsel for the Fast Food Workers Organizing Committee, the union-backed group behind the protest movement, felt Griffin was right to treat McDonald's as a joint employer because of the control it exerts over franchises, including the way food is prepared and served.

Kendall Fells, organizing director of Fast Food Forward, chimed in saying, "It's time McDonald's put its powers to work to do something about the fact that its workers are living in poverty, instead of spending tens of millions on corporate lobbyists to defend a status quo that forces its workers to rely on food stamps to get by."

The International Franchise Association disagreed, voicing its opinion as NLRB filed its lawsuits against McDonald's and certain franchisees on December 19. Robert Cresanti, executive vice president of government relations and public policy stated, "This is the nightmare before Christmas for local franchise businesses."

Cresanti said the board has effectively legislated a change to the definition of who an employer is, which will impact hundreds of thousands of businesses. He declared, "Unelected government bureaucrats, let alone one prosecutor, should not have such power."

He continued saying, "IFA will vigorously challenge what the NLRB has done today in the interest of preserving the balance of power between our branches of government to reverse this in the name of job preservation, economic expansion, the rule of law and sound public policy. IFA will lead that charge and we are confident in its ultimate outcome to preserve the franchise model."

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About Janet Sparks

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Public Profile

Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at or at 303-799-7398.