- The National Labor Relations Board (NLRB) Dec. 12 approved a settlement agreement involving McDonald's franchise workers that also absolved the corporation from joint employment responsibility for certain alleged labor violations, the agency said in a press release.
- The 2-1 ruling approved a roughly $170,000 settlement between McDonald's operators and their employees, Bloomberg Law reported. The groups claimed that McDonald's fired workers for engaging in union activity.
- This ruling suggests it's unlikely the agency will punish franchisers for the violations of their operators in the future, per Bloomberg Law.
McDonald's victory could protect other restaurants from liability for operators' infractions in the future — a win for chains and a serious blow to labor groups.
The 20 employees who filed charges against McDonald's in 2012 hoped to hold the fast food giant responsible for what alleged retaliation against employees looking to unionize. But McDonald's argued that it doesn't employ those workers directly because 95% of its U.S. system is owned and operated by franchisees.
This particular battle had become a symbol of the American fast food worker's struggle for agency, and the ruling may inform future disputes — and have other major chains breathing a sigh of relief. Whether the ruling will discourage other fast food employees from naming other companies in labor suits is unclear. Still, in today's talent-strapped market, restaurant experts say employers need to be seen as progressive and supportive of employee welfare to attract and retain workers.
This is a battle McDonald's appears to be losing. The company has faced a recent slew of sexual harassment suits claiming the chain has "systemic" issues and ignores complaints from workers. It also was sued in November by 17 employees for failing to address workplace violence at its restaurants.
In one of the larger cases this year, workers filed a suit claiming that a Bay Area franchiser violated overtime and meal and rest break requirements, and sued both the operator and McDonald's as joint employers. The employees argued that McDonald's computer system, which is used for timekeeping, was involved in the violations, so corporate should be on the hook. While the franchiser paid employees $235,000 in a settlement, a federal judge said the corporate entity's oversight of store workers was on brand management and quality control issues, not day-to-day operations.
While these decisions may signal that McDonald's can avoid monetary damage, the brand's image could suffer among both customers and prospective employees.