The National Labor Relations Board on Tuesday told McDonald’s that is can be named a “joint employer” for workers at franchise restaurants, a decision that could hold McDonald’s responsible for conditions in franchisees’ stores, the Associated Press reported.
Workers in California, Michigan and New York have sued McDonald’s and franchise store owners for illegally underpaying workers. McDonald’s argued that it should not be liable since franchises are independently operated.
Lawyers in the case argue that McDonald’s should be considered a joint employer and should be liable for conditions at franchise locations because the company provides software to franchisees that sets an employee-to-sales ratio for the stores.
Cue Jim Cramer/FoxBusiness meltdown in 3… 2…
Andrew Napolitano might even weigh in.
This is very important and correct ruling. The multinational franchisors (not just McDonald’s) dictate policies, including forcing franchises to sell “Dollar Menus”, rather than charge the outrageous price of, say, a buck and a quarter and pay the workers a living wage.
It goes beyond that. McDonald’s can extract high rents from the franchisees, and force them to renovated their buildings regardless of how it affects their bottom lines. Corporate can make it almost impossible for a location to make a profit, forcing them to either fold or resort to do things like keeping labor rates as low as possible, for example. McDonald’s should definitely be on the hook for the wage levels of their employees.
One of the main uses of the franchise system is to insulate the corporations from their responsibilities as employers. The companies like leaving the direct screwing of the worker to the franchisee.