Dive Brief:
- A major hearing on joint employer status is underway in New York City, set to determine whether McDonald's corporate can be held liable for franchised stores who allegedly violate labor laws, according to the Chicago Tribune.
- The outcome could push McDonald's closer to cutting a deal, the Tribune says, because of the heavily publicized nationwide battle to improve low-paid fast-food working conditions.
- It's been two years since the NLRB's general counsel ruled that McDonald's could be co-liable with franchise operators accused of firing, threatening or penalizing workers who participated in protest strikes over a $15-an-hour minimum wage.
Dive Insight:
McDonald's hasn't remained quiet about the earlier NLRB ruling, claiming that the decision strikes at the "heart of the franchise system." The Tribune says approximately 90% of McDonald's U.S. restaurants are franchisee-owned and historically not responsible for employment issues such as wages.
Lawyers representing the plaintiffs in the case say it's just a McDonald's issue, but franchisers are worried that a McDonald's loss could negatively impact franchise development. It could potentially allow labor unions to deal directly with the main corporate entity (rather than with the franchisees) and that would give sagging unions new energy, Cesar Rosado, an associate professor of labor law at Chicago-Kent College of Law, told the Tribune.
The New York hearing also will deal with an illegal retaliation charge against workers, and there are future hearings slated for Chicago and Los Angeles to address the unfair labor practice complaints against McDonald's restaurants in each region (no date yet). The NLRB ruled 3-2 in August in a similar case, which now is under appeal.
