Fast-food chain McDonald's illegally retaliated against workers who participated in union organizing activities, the general counsel for the National Labor Relations Board (NLRB) alleged Friday.
The labor board attorney said the fast food company engaged in practices such as "threats, surveillance, interrogation, promises of benefit, and overbroad restrictions on communicating with union representatives or with other employees about unions" in restaurants across the country.
Union organizing is protected under the federal National Labor Relations Act (NLRA).
Crucially, the general counsel argues that the McDonald's Corporation is responsible for the alleged mistreatment of employees at franchised restaurants. In labor complaints filed with the NLRB back in March, workers alleged that the corporation was a "joint employer" with the proprietors of individual McDonald's franchises, making both McDonald's and its franchisees responsible for any labor law violations that may occur within those franchised restaurants.
McDonald's — along with powerful industry groups such as the International Franchise Association (IFA) — has typically asserted that franchisees are the sole employers of workers at such restaurants, and that parent companies are not liable for how those workers are treated. But the NLRB rejected that logic in its finding on Friday, saying that McDonald's "engages in sufficient control over its franchisees' operations, beyond protection of the brand, to make it a putative joint employer with its franchisees."
That determination, if affirmed in federal court, could open the door for many more franchising corporations to be considered joint employers with their franchisees. As such, they would be responsible for ensuring compliance with labor law, and potentially embroil them directly in unionization battles at franchisee workplaces.
"It would bring them both to the table at the same time," said Seattle University School of Law professor Charlotte Garden, referring to franchisors and franchisees.
IFA executive vice president of government relations and public policy Robert Cresanti described the NLRB's ruling as a "nightmare before Christmas for local franchise businesses" in a statement.
"The Board has effectively legislated a change to the definition of who an employer is, which will impact hundreds of thousands of businesses," he said.
The general counsel has already been attempting to settle complaints between workers and McDonald's, and says it will continue to do so. Where no hearing can be reached, a series of administrative law judges will hear arguments from McDonald's and the general counsel on the workers' labor complaints. Those cases could eventually go before the NLRB itself, as well as onward to a circuit court.
"There's a long road to go before there's a decision in this case," said Garden. The NLRB process could take just a few months, but "the circuit court process certainly can be lengthier."
McDonald's has made clear that it intends to fight the general counsel's allegations in court.
"These allegations are driven in large part by a two-year, union-financed campaign that has targeted the McDonald’s brand and impacted McDonald’s restaurants," said the company in a statement, referring to the union-backed campaign, which has led several strikes against the company and other fast food outlets in the past two years. "McDonald’s has taken the appropriate measures, working properly with its independent franchisees, to defend itself against that attack on its business."
The NLRB general counsel first indicated that McDonald's could be considered a joint employer in labor complaints back in July.