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Court rules McDonald’s responsible for wage theft, worker’s rights violations in franchises

Sandra Larson | 8/6/2014, 12:25 p.m.

Boston fast-food workers rallied July 30 at a local McDonald’s, calling on the $5.6 billion company to “stop hiding behind its franchisees,” pay its workers $15 an hour and respect their right to form a union without retaliation. This comes after the National Labor Relations Board said Tuesday that McDonald’s plays a critical role in employment decisions at its restaurants, despite the fast-food giant’s repeated assertions to the contrary.

The move by the NLRB general counsel to consider McDonald’s a joint employer with its franchisees paves the way for cases alleging illegal activity by McDonald’s, not just its franchisees, to proceed in Boston.

Waving signs reading “Who’s the Boss? McDonald’s.” and “Boston Stands with Fast Food Workers” and chanting, “You can’t run. You can’t hide. Make our wages supersized,” fast-food workers and faith and community supporters rallied outside the McDonald’s on Tremont Street across from the Boston Common.

“The goal of this campaign is to have fast food workers paid $15 per hour and to have the right to unionize,” said Reginald Zimmerman,
a spokesperson for MASSUniting, a coalition of community groups, faith organizations and labor that helped organize the rally. “They’re going to continue fighting until that happens.”

McDonald’s has repeatedly asserted that it does not control employment decisions at its franchised restaurants. But the National Labor Relations Board’s general counsel said Tuesday that the $5.6 billion company is indeed a joint employer that exerts substantial power over its employees’ working conditions.

In a determination that carries widespread implications for the fast-food industry, the general counsel found that McDonald’s wields such extensive influence over the business operations of its franchisees that individual franchise operators have little autonomy in setting or controlling workplace conditions. McDonald’s, for all intents and purposes, is the employer.

On July 29, the general counsel’s office informed NLRB regional directors in offices around the country that McDonald’s should be treated as an employer. There are dozens of charges alleging illegal conduct by the fast-food giant pending in at least 17 cities that could now be adjudicated using the government’s new directive.

“McDonald’s can try to hide behind its franchisees, but 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, an attorney at Levy Ratner who brought the case on behalf of McDonald’s workers in New York City. “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.”

For nearly two years, workers at McDonald’s and other fast-food workers across the country have been joining together and going on strike, calling for $15 and the right to form a union without retaliation. But McDonald’s and other industry players have tried to sidestep workers’ calls, claiming that responsibility for wages and working conditions falls squarely on the shoulder of franchisees.

The government’s determination is the latest challenge to the fast-food industry’s low-wage business model, in which labor advocates say franchisors reap rewards of a profitable industry while forcing franchisees to shoulder all the risk. In March, McDonald’s workers in three states filed class-action lawsuits against the company, alleging widespread wage theft.

The New York Times wrote that the suits “argue that both the corporate parent and the independently owned franchises where many of the plaintiffs work are jointly responsible for illegal pay practices carried out by the franchises …That strikes at the heart of the low-wage fast-food business model.”

The recent Boston rally brought out dozens of workers from local fast food operations including McDonald’s, Dunkin’ Donuts and Burger King.

Kyle King, 46, a cashier at Burger King in Boston who attended the rally, called the NLRB decision a “major victory.”

“As franchise workers, we know the corporation has everything to do with how the franchises are run,” he said.

King, who currently makes $9 an hour, said a $15 wage would mean a lot, especially for those who have to work multiple jobs to make ends meet.

“Not just for me, but for everybody — it would mean more of a stable life, not so much of a struggle to pay rent, or a mortgage, and take care of kids,” he said. “It’s not the end-all, but at least it’s a start.”