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Ruling: McDonald's Corporation Can Be Held Liable for Working Conditions

Photo: Mike Mozart/Flickr

Here's a potential game-changer in the ongoing fast-food living wage strikes: The AP reports this afternoon that the National Labor Relations Board has ruled that the McDonald's Corporation is considered a "joint employer" along with its franchisee owners. Translation: The fast-food mega-giant can now be held liable for the working conditions at any of its restaurants. The decision could mean that McDonald's — and other fast-food chains — will no longer be able to pass to buck in lawsuits about wages. To date, McDonald's and other large fast-food corporations have argued they cannot be held accountable for the wages set by franchise owners, as they are not the direct "employer" of those workers.

The AP reports that McDonald's plans to contest the ruling, with a representative reiterating that the corporation has nothing to do with hiring employees or setting wages. According to a McDonald's VP of human resources, the decision "is such a radical departure that it should be a concern to business men and women across the country." The National Restaurant Association, an advocacy group for "foodservice industry interests," issued a similar statement in response, saying the ruling "would disrupt the franchisor-franchisee relationship and impede entrepreneurship and restaurants' ability to continue to create jobs."

In the past few months, several groups have won settlements on behalf of workers who alleged they suffered wage violations and other violations of working conditions while on the job. In these instances, however, settlements were achieved between workers and franchisees, not the corporations (in these cases, McDonald's and Domino's).

Labor organizers have long argued, however, that corporate practices — including collecting sales and labor data from franchisees while setting prices — indirectly controls labor standards. (In a statement released late this afternoon, a representative from the National Employment Law Project praised the ruling based on those grounds, arguing: "When companies like McDonald's intervene to such an extent in franchised operations, they should be held accountable, along with their franchisees, for practices that violate the law." And tone-deaf financial advice on McDonald's corporate website suggests its corporate office at least acknowledges workers at its franchises are poorly paid. More as it becomes available.

· McDonald's: Regulator Says It's a 'Joint Employer' [AP]
· All Minimum Wage Coverage on Eater [-E-]
· All McDonald's Coverage on Eater [-E-]