McDonald’s Cannot Dodge Its Illegal Treatment of Workers

Corporate executives and industry lobbyists started cheering this month before the ink had even dried on a decision by the Trump administration’s National Labor Relations Board overturning an Obama-era “joint employer” standard.

This standard, they had feared, would make it easier for employees to hold fast-food chains accountable for violating the rights of workers employed by those chains’ franchisees or contractors like staffing agencies.

The ruling is just the latest example of how the Trump administration has favored corporations over working people. But the world’s biggest fast-food chain – McDonald’s – has not been spared from its day in court.

Over the past three years, the NLRB’s general counsel has built an extensive case against McDonald’s, charging the company as a “joint employer” along with franchisees for illegally surveilling, disciplining and firing workers who have gone on strike to demand $15 an hour and union rights.

That case is now in its final days of trial before an administrative law judge, and an NLRB ruling finding McDonald’s liable as a joint employer would be a landmark victory for workers’ rights, particularly in the current economy where companies are increasingly using franchising and subcontracting, and then dodging their responsibilities to employees.

And importantly, a strong case remains for holding McDonald’s accountable as a joint employer, even under the more narrow definition reinstated by the Trump-era Labor Board. Indeed, the Board’s case against McDonald’s was opened in December 2014, well before it adopted a broader joint employer test in its Browning-Ferris decision in August 2015.

As a result, mountains of evidence the Board has extracted from McDonald’s through subpoenas and depositions over the past three have been collected to support a joint employer case under the more narrow definition that is now law – specifically, that the fast-food giant exerts “direct and immediate” control over employees at franchised stores.

Even a surface-level review of McDonald’s operations makes clear the company exerts direct, extensive control over its franchisees. McDonald’s owns the property and dictates the locations where franchisees operate. The company also specifies the supply chain vendors, pricing, and store hours for franchisees.

McDonald’s hi-tech quality service protocols dictate highly-specific customer scripts, cleanliness and appearance rules, and real-time monitoring of worker hours, staffing levels, clocking-in and -out times, and revenues at each outlet.

McDonald’s trademark and possibly unique micro-management of the conditions in its franchised stores is a reality the company has nevertheless doggedly denied over the past several years.

And its motive is clear: By denying its status as the boss, the company can absolve itself of responsibility for the intolerable consequences of its business model, like the fact that more than half its employees are paid so little they rely on public assistance like food stamps and Medicaid to support themselves.           

McDonald’s made a choice to exert such heavy-handed control over its franchisees – not all franchisors follow the same pattern – and as a result, it bears clear responsibility for the wave of firings and other retaliatory actions its cooks and cashiers faced as part of their involvement in the Fight for $15 movement. But this case also has implications for the economy well beyond McDonald’s.

This trial is the first time a full, objective record of the business model and operations of a modern franchise has been collected and submitted as evidence before the NLRB for a decision on the question of joint employer status. A ruling in the McDonald’s case will provide an important new level of insight into what counts as a joint employer in fast food franchising under current law.

The overwhelming evidence pointing to McDonald’s status as a joint employer likely explains why the company has done everything in its power to delay the government’s case over the last three years – perhaps in the hope that an unexpected change in power, like the election of Donald Trump, would prove a saving grace.

But even the weakened joint employer standards now revived by Trump’s Labor Board are no free pass for McDonald’s, as its record of deep and wide-ranging control over its franchisees is clear.

And a ruling holding the world’s biggest franchisor accountable for the mistreatment of its employees will validate what workers at the Golden Arches have insisted in this case from Day 1 – that franchise schemes like the one McDonald’s has developed and perfected are no shield from the law.   

M. Patricia Smith is senior counsel at the National Employment Law Project and former solicitor of the U.S. Department of Labor.