NLRB vs McDonald's Could Make Both Franchisors and Franchisees Losers

As reported in the Wall Street Journal, a hearing began Monday before a Federal judge, regarding the NLRB ruling that McDonald's shares responsibility for the actions of their franchisees. A ruling in favor of the NLRB could result in a decision that hurts both franchisors and franchisees.

As legal proceedings got under way in a labor dispute that could upend the relationship between big retailers and their franchisees, an attorney for McDonald's Corp. told a federal administrative judge the company is the victim of a union-orchestrated attack on its brand.At issue in the hearings that began Monday is whether companies like McDonald’s share responsibility for the actions of their franchisees, particularly regarding complaints about low wages paid to fast-food workers.

There is little doubt that this case was started and is being fueled by political and pro-union actions

The National Labor Relations Board’s general counsel, an Obama administration appointed lawyer with wide authority to prosecute unfair labor practices, determined in July that in the case of McDonald's, the answer is yes. He later issued complaints alleging the fast-food company and several franchisees violated the rights of restaurant workers who participated in activities to improve their wages and working conditions. The moves were the latest in a fraught relationship between U.S. firms and the labor board, and they came as pressure is building to give low-wage workers raises.