Court Rules Workers Can Sue McDonald’s

Quick-service workers’ rights triumphed in court last week, when the National Labor Relations Board ruled that store employees can sue McDonald’s Corp., which it said is responsible for the labor violations of its franchisees. NLRB General Counsel Richard Griffin determined that McDonald’s should be considered a “joint employer,” along with the franchise owners who operate thousands of stores around the country. About 80% of McDonald’s—more than 35,000 restaurants—are operated by franchise owners.

Labor groups applauded the decision, saying it proved that McDonald’s needs to accept its responsibilities as an employer.

“Today’s determination by the NLRB shows there’s no two ways about it: The Golden Arches is an employer, plain and simple,” said Micah Wissinger, the attorney representing the restaurant’s employees in New York, told The Hill. “The reality is that McDonald’s requires franchisees to adhere to such regimented rules and regulations that there’s no doubt who’s really in charge.”

The National Restaurant Association condemned the decision for its potentially devastating impact on McDonald’s and all companies that operate franchises. The NRA said the ruling “jeopardizes the success of 90% of American restaurants, which are independent operators or franchisees.”

While the NLRB’s decision holds companies liable for the actions of their franchisees, critics of the ruling say it also removes the ability of franchise owners to operate independently.

“Ruling that franchises are joint employers will be a devastating blow to franchise businesses and the franchise model,” said Steve Caldeira, pres./CEO-International Franchise Association. He added that thousands of small business owners could lose control of their businesses and the equity they have built in them.