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NLRB ruling holds McDonald's, not just franchisees, liable for worker treatment

Protesters gather outside of the McDonald’s Corp. headquarters in Oak Brook, Ill., during the company’s annual shareholders meeting in May to demonstrate for a $15-an-hour wage and the right to unionize.

Associated Press

Protesters gather outside of the McDonald’s Corp. headquarters in Oak Brook, Ill., during the company’s annual shareholders meeting in May to demonstrate for a $15-an-hour wage and the right to unionize.

The general counsel of the National Labor Relations Board ruled Tuesday that McDonald's is the joint employer for workers at its franchisees' restaurants, a decision that, if upheld, would disrupt longtime practices in the fast-food industry and ease the way for unionizing nationwide.

Richard Griffin Jr., the labor board's general counsel, said that of the 181 unfair labor practice complaints filed against McDonald's and its franchisees over the past 20 months, he found that 43 had merit on such grounds as illegally firing or threatening workers for pro-union activities.

In those cases, Griffin said he would include McDonald's as a joint employer, a classification that could hold the fast-food company responsible for actions taken at thousands of its restaurants. Roughly 90 percent of the chain's restaurants in the United States are franchise operations.

As fast-food workers and labor advocates have been pressuring McDonald's and other restaurant chains to adopt a $15 wage floor, the companies have often said that they don't set employee wages, the franchise owners do. That defense would be weakened considerably by the workers' push to have them declared joint employers.

In a statement, Angelo Amador, vice president of labor and workforce policy for the National Restaurant Association, called the ruling another example of the Obama administration's anti-small-business agenda. The ruling, he said, "overturns 30 years of established law regarding the franchise model in the United States, erodes the proven franchisor/franchisee relationship, and jeopardizes the success of 90 percent of America's restaurants who are independent operators or franchisees."

If upheld, the general counsel's move would give the fast-food workers and the main labor group backing them, the Service Employees International Union, more leverage in their effort to unionize McDonald's restaurants and to increase hourly wages. The average fast-food wage is about $8.90 an hour.

The fast-food workers movement has argued that McDonald's should be considered a joint employer because it owns many of the franchisees' restaurant buildings and requires franchises to follow strict rules on food, cleanliness and hiring. McDonald's has even warned some franchisees that they were paying their workers too much.

The cases were brought on behalf of workers who assert, among other things, that they were wrongfully fired, threatened or suspended because of their campaign for a $15 hourly wage and to unionize McDonald's.

NLRB ruling holds McDonald's, not just franchisees, liable for worker treatment 07/29/14 [Last modified: Tuesday, July 29, 2014 7:29pm]
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