On Tuesday the U.S. National Labor Relations Board found that McDonald’s is a joint employer with its franchisees and can be held accountable for the franchisee’s poor labor practices. The NLRB sided with workers who filed cases against McDonald’s claiming that the corporation is the one really calling the shots because it exerts tight controls on nearly every aspect of a given store’s operation, including employment practices.
This has broad implications for many other companies with closely-controlled franchise requirements, and may even pave a trail for the fast food unionization movement.
In April I wrote about a Hart Research Poll which showed a shocking 89 percent of fast food employees faced some form of wage theft. Such wage theft comes in many forms from requiring work before clocking in and after clocking out, to making all sorts of unjustified automatic deductions from employee paychecks, including meals that were never eaten or items that went missing from the restaurant. For one of the most egregious forms of wage theft, employers exploit the corporation’s own time management software to doctor employee paychecks, shortening time or making it seem like employees had gotten a break when they hadn’t.
And yet, when these rampant problems come to the fore, major fast food corporations have traditionally been able to say, “It wasn’t us, it was the franchisee.” While the corporate entity may hold tight control over business practices all the way down to the color of the drapes, they have classically held that they aren’t accountable for poor labor practices because they don’t control that part. This week’s decision will make it a lot more difficult for McDonald’s to make that claim and distance itself from the bad labor practices of its franchisees.Click to continue reading »