The golden arches will now take on more responsibility for the employees who fall under its umbrella brand.
On Tuesday, the National Labor Relations Board ruled that the McDonald’s corporation could be considered a “joint employer” for workers in its franchise operations.
The ruling has broad implications for McDonald’s and other franchises, as low-wage workers seek higher pay and the right to organize.
Out of the 14,000 U.S.-based McDonald's outlets, 90 percent are franchises.
Typically in a franchise model, the parent company leases its brand to independently run shops and those individual shops are responsible for the employees. This differs from the model in which the parent company owns all the stores and employees are subject to the same rules.
But the new NLRB ruling on McDonald's says the company shares responsibility for franchise operations.
For the past two years, fast-food workers have been staging periodic one-day strikes.
Since the protests began, workers have filed 181 complaints against McDonald's, alleging that workers had been fired or penalized for their pro-labor rallies.
The NLRB's general counsel has ruled that 43 complaints have merit, 68 have been dismissed and another 64 remain under investigation.
McDonald's has promised to contest the NLRB's decision, saying in a statement on its website that “this decision... goes against decades of established law regarding the franchise model."
"McDonald’s does not direct or co-determine the hiring, termination, wages, hours, or any other essential terms and conditions of employment of our franchisees’ employees — which are the well-established criteria governing the definition of a ‘joint employer.’”
The next step in this process will involve hearings before administrative law judges.
Could this ruling change the franchise business model?
Fast-food workers want better pay. Does this ruling help their cause?
Could it lead to the unionization of more low-wage workers?
We consulted a panel of experts for the Inside Story.